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Bayer agreed to spend billions to settle thousands of U.S. lawsuits, taking its biggest step so far in resolving headaches the German chemical giant inherited with its 2018 acquisition of Monsanto.
Agreements were reached on about 95,000 claims filed over Roundup, part of a Bayer plan to spend as much as $10.9 billion to settle all litigation linked to the popular herbicide, the Leverkusen, Germany-based company said Wednesday.
The company also said it will pay as much as $820 million to settle toxic chemical pollution claims and a $400 million payment for those affected by its dicamba herbicide.
Taken together, the accords resolve major legal issues since Bayer bought Monsanto for $63 billion.
A surge in Roundup claims - and big U.S. court losses - wiped tens of billions of dollars off Bayer's market value.
Getting past the legal drama is a top priority for CEO Werner Baumann.
The settlement is more comprehensive than expected as it includes the dicamba and PCB cases, and the price will be reasonable for most investors, Sebastian Bray, an analyst at Berenberg, said by email.
It's a 'big relief,” Bray said, and 'should allow investors to draw a line under the saga of the last two years.”
The Roundup agreements will resolve 75 percent of about 125,000 filed claims and those that were unfiled, the company said Wednesday in a statement.
Bayer said it will pay $10.1 billion to $10.9 billion to resolve all lawsuits over the popular herbicide, including $1.25 billion for future claims handled as a class action.
Separately, Bayer said it agreed to pay about $820 million to settle most claims over water contaminated with Polychlorinated biphenyls, or PCBs, and as much as $400 million to resolve claims related to damage when dicamba sprayed on crops drifted to nearby farms.
In their lawsuits, users blame Roundup and its active ingredient - the chemical glyphosate - for their non-Hodgkin's lymphoma and other cancers.
The company denies glyphosate is a carcinogen, a position backed by the U.S. Environmental Protection Agency.
To be sure, thousands of Roundup claims remain unresolved.
'The remaining cases are in the hands of lawyers who know how to litigate, so we're going to see some more Roundup trials in the future,” said Fletch Trammell, a Texas-based lawyer who held his approximately 5,000 cases out of the settlement.
'This litigation is far from over.”
Bayer faced a surge in new lawsuits last year after it lost three big jury trials, and investors issued a rare rebuke to Baumann last spring.
Some, including Elliott Management Corp., urged the company to seek a comprehensive settlement.
Bayer is appealing the verdicts it lost.
Since last summer, Baumann has kept Bayer out of more trials while engaging in high-stakes mediation talks.
In April, he won the annual confidence vote from 93 percent of shareholders amid signs that Bayer might soon reach a resolution.