Bayer AG has reached verbal agreements to resolve a substantial portion of an estimated 125,000 U.S. cancer lawsuits over use of its Roundup weedkiller, according to people familiar with the negotiations.
The deals, which have yet to be signed and cover an estimated 50,000 to 85,000 suits, are part of a $10 billion Bayer plan to end a costly legal battle the company inherited when it acquired Monsanto in 2018, the people said. While some lawyers are still holding out, payouts for settled cases will range from a few million dollars to a few thousand each, said the people, who asked not to be identified because they aren't authorized to speak publicly.
Bayer is likely to announce the settlements, which need approval from the supervisory board, in June, people familiar with the negotiations said. None of the deals are signed, though plaintiffs' lawyers are expected to do so the day of the announcement, the people said.
Getting past the Roundup drama is a top priority for Chief Executive Officer Werner Baumann, who orchestrated the $63 billion Monsanto takeover and has suffered the legal consequences ever since. The surge of Roundup claims, along with three big U.S. court losses, hammered the company's stock, wiping tens of billions of dollars from the market value and prompting shareholders to issue Baumann an unprecedented rebuke in the spring.
But since last summer, the CEO has kept the company out of more jury trials while engaging in high-stakes mediation talks. Last month, he won the annual confidence vote from 93% of shareholders amid signs that Bayer might soon reach a resolution.
"A settlement of all U.S. lawsuits for $10 billion should be a major share price trigger for Bayer," Markus Mayer, an analyst at Baader Bank, said Monday by email.
Once a resolution is in place, Baumann will have to prove that his strategy of pairing pharmaceuticals, consumer health and agriculture makes sense. Some investors have doubts about the approach.
Bayer declined to comment on specifics about the talks. Chris Loder, a U.S.-based spokesman, said Friday the company has made "progress in the mediations" that arose from lawsuits. "The company will not speculate about settlement outcomes or timing," Loder said in an emailed statement. "As we have said previously, the company will consider a resolution if it is financially reasonable and provides a process to resolve potential future litigation."
Business on 05/27/2020