Bayer AG's top executives have mounted a campaign to reassure its staff and shareholders that the company can contain fallout over its newly acquired weedkiller Roundup, as a public reckoning before investors looms at the end of the month.
Chief Executive Officer Werner Baumann held a conference call with employees around the world last week, assuring them that the 155-year-old German company will weather the challenge despite its second loss in U.S. courts, according to people familiar with the situation.
Pharmaceuticals chief Stefan Oelrich held a similar meeting focusing on strategic priorities, said the people, who asked not to be identified because the calls were private. Other divisional managers also conducted briefings, according to one person.
The internal damage-control initiative comes as Baumann prepares to face questions at Bayer's annual shareholders' meeting on April 26 from investors angry at how the company's fortunes have faltered since it completed the $63 billion acquisition of Roundup owner Monsanto in June. The shares have dropped about 40 percent since then, wiping out more than $39 billion in market value.
A Bayer representative declined to comment on internal communication. The company has repeatedly said it will defend Roundup vigorously and that scientific studies have shown its key ingredient, a chemical called glyphosate, to be safe. More than 11,200 lawsuits in the U.S. seek to link the herbicide to cancer.
Controversy over Roundup is also stirring in Bayer's home market, as two German states will make a renewed effort next week in the upper house of parliament to limit the use of glyphosate. Thuringia and Bremen want a ban introduced in areas such as private gardens and nursery schools, as well as on the weedkiller's use immediately before crops are harvested.
German shareholder gatherings are popular and occasionally fractious affairs: thousands of investors plunder the buffet, and CEOs are grilled on minute details of the company's performance for the better part of a day.
In one sign of shareholder protest at Bayer, corporate governance expert Christian Strenger, a former CEO of DWS Investments, has filed a motion proposing that management board members not be discharged of responsibility for their actions last year. Should it pass, it would have few practical ramifications but would be a harsh rebuke for Baumann and other managers.
Bayer's supervisory board has backed the CEO, writing in a response last week that he and other top managers "discussed the opportunities and risks of the acquisition very extensively and in numerous meetings and carefully weighed them against each other" before agreeing to buy Monsanto in September 2016.
At that time, there were about 120 pending lawsuits over glyphosate, Roundup's main ingredient, Bayer said. That number has multiplied, and the company last month lost its second lawsuit over claims the weedkiller causes cancer.
In that case, a jury in San Francisco federal court awarded compensatory damages of $5.3 million and punitive damages of $75 million to a 70-year-old man who became ill after spraying the herbicide on his property for decades. The verdict followed a similar decision by a state court jury last summer. Bayer has appealed the earlier case and plans to appeal the more recent one.
Information for this article was contributed by Cynthia Koons and Iain Rogers of Bloomberg News.
SundayMonday Business on 04/07/2019