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U.S. CONCLUDES INVESTIGATION OF BAXTER

 DEERFIELD, Ill., March 25 /PRNewswire/ -- Baxter International said it has reached separate agreements with the U.S. Department of Justice through the U.S. attorney's office in Chicago and with the U.S. Department of Commerce, bringing to an end the government's three-year investigation of the company's business dealings in the Middle East during the late 1980s.
 Under the terms of the agreement with the Justice Department, Baxter acknowledged that in February 1988 it provided to Arab authorities a letter which contained information about its ongoing business in Israel. The Justice Department concluded that providing the information was in violation of a provision of the Export Administration Act. The company said that, while it intended its actions in 1988 to be in compliance with the local-law exception provided for under the Act, it now recognizes that it was mistaken. Baxter, therefore, will plead guilty to violating the provision and expects to pay a fine of $500,000. Under certain circumstances, the local-law exception permits companies that are seeking to establish a business in Arab countries to provide information about their business in Israel.
 Under the civil settlement with the Commerce Department, Baxter, two of its subsidiaries and its general counsel admitted to providing information about the company's operations in Israel. Baxter and its subsidiaries will pay $5,959,500 and General Counsel G. Marshall Abbey will pay $101,100 to settle the matter. In addition, Baxter has agreed not to export U.S. products or technologies to Syria or Saudi Arabia for two years, except for commitments under existing contracts. Significantly, the agreement reached with the U.S. Department of Commerce does not constitute a finding or a determination that Baxter, its subsidiaries or Mr. Abbey violated anti-boycott laws.
 Baxter also said that three derivative lawsuits have been consolidated in Delaware and settled, subject to notice to Baxter shareholders and approval of the Delaware Chancery Court. The court has enjoined any further shareholder litigation with regard to this matter, pending approval of the settlement.
 Baxter will reflect payment of its settlements with the Justice Department and the Commerce Department and related legal fees as a one- time charge of $7.5 million in the first quarter. The company believes that the agreements and settlements, including the derivative settlements, will not materially affect the company's financial- performance expectations for the year.
 "Baxter fully supports the Export Administration Act and opposes boycotts of any kind against Israel," said Anthony J. Rucci, Baxter senior vice president. "Our intent has always been to comply fully with the Export Administration Act. We now realize that our actions did not comply with the 'local-law exception' provided under the Act. We respect the government's conclusions in this investigation, and we are pleased that the issue is now resolved.
 "We are particularly pleased that the government's investigation did not find that Baxter had refused to do business with Israel, as some have alleged. As a matter of record, Baxter has been conducting business in Israel continuously for more than 20 years. We remain fully committed to providing the best possible health-care products to Israel, which is by far our largest trading partner in the Middle East."
 Baxter's sales to Israel have grown consistently. In 1992, those sales were approximately $6 million, almost double the company's sales to any other nation in the Middle East. In 1988, Baxter established a long-term technology-license agreement with Teva Pharmaceutical Industries, Israel's largest pharmaceutical company.
 The company also imports from Israel a variety of products and services, including technology and components used to produce flow- control devices for intravenous fluids. These products and services represented more than $2 million in export revenues for Israel in 1992.
 Baxter has a long-standing relationship with the Weizmann Institute of Science in Israel. In 1978, the institute established the William B. Graham Chair in Pharmacology, an endowed chair in honor of Baxter's senior chairman. The company also has purchased from the Weizmann Institute monoclonal-antibody cell lines used in Baxter's diagnostics research. Baxter recently announced a series of research projects in collaboration with the Weizmann Institute to develop gene-therapy and immunotherapy products that may be used to treat cancer and infectious diseases such as AIDS. In addition, the company funds the work of a number of scientists at other leading research institutions in Israel.
 "We remain committed to providing our products to patients who need them around the world," Rucci said. "Baxter is not a company that has exclusionary practices towards Israel or any nation. In fact, we have maintained and are building on the constructive relationships we enjoy with organizations and researchers in Israel."
 Baxter, through its subsidiaries, is the leading manufacturer and marketer of health-care products, systems and services worldwide.
 -0- 3/25/93
 /CONTACT: Geoffrey D. Fenton for Baxter, 708-948-4317 or 708-948-3436/
 (BAX)


CO: Baxter International ST: Illinois IN: MTC SU:

LR -- NY050 -- 9583 03/25/93 12:22 EST
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Date:Mar 25, 1993
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