Bayer to pay up to $10.9 bln to settle bulk of Roundup weedkiller cancer lawsuits
HEALTH

Bayer to pay up to $10.9 bln to settle bulk of Roundup weedkiller cancer lawsuits

News Service Reuters

Bayer AG, after more than a year of talks, agreed to pay as much as $10.9 billion to settle close to 100,000 U.S. lawsuits claiming that its widely-used weedkiller Roundup caused cancer, resolving litigation that has pummeled the company's share price.

The German drugs and pesticides maker has come to terms with about 75% of the 125,000 filed and unfiled claims overall, it said in a statement on Wednesday of the deal to end legal disputes it inherited with its $63 billion takeover of Monsanto in 2018.

The settled cases over Roundup and other glyphosate-based weedkillers account for about 95% of those currently set for trial, it added.

"The Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end," Bayer Chief Executive Werner Baumann said. "Unfortunately, we have to pay an awful lot of money for a product which is perfectly regulated."

The company said it will make a payment of $8.8 billion to $9.6 billion to resolve the current Roundup litigation - including an allowance expected to cover unresolved claims - and $1.25 billion to support a separate class agreement to address potential future litigation.

Bayer did not admit liability or wrongdoing.

"Bayer is not getting complete relief, but trying to do as much as it can to calm uncertainty," said Adam Zimmerman, a law professor at Loyola Law School who has followed the litigation.

The deal dwarfs previous out-of-court product liability settlements, such as Merck & Co's $5 billion deal to end litigation over its withdrawn painkiller Vioxx, and Bayer deals worth $2 billion to settle claims of harm caused by its Yasmin and Yaz birth control pills.

Ken Feinberg, who was appointed settlement mediator by a federal judge more than a year ago, said that while nearly 25,000 claims remained unsettled there will be no more trials as cases settle in coming months.

"Bayer wisely decided to settle the litigation rather than roll the dice in American court," said Feinberg, who has mediated other high-profile disputes, including over the September 11th Victim Compensation Fund, the BP Deepwater Horizon disaster and Volkswagen's diesel emissions scandal.

APPEALS TO CONTINUE

The three cases that have gone to trial will continue through the appeals process and are not covered by the settlement, Bayer said.

A U.S. federal appeals court on Monday permanently blocked California from requiring a cancer warning on glyphosate-based Roundup. That ruling is separate from the wider litigation over whether Roundup causes a type of blood cancer.

The company, whose management in April regained shareholder support for its handling of the litigation, has denied claims that Roundup or its active ingredient glyphosate causes cancer, saying decades of independent studies have shown the product is safe for human use.

Bayer said it expects to maintain its investment grade credit ratings and intends to keep its dividend policy.

The prospect of a surge in fresh lawsuits, fighting more than 20 trials a year and the accompanying unfavorable media coverage swayed Bayer to come to terms with claimants.

"We are well aware of the negative impact high profile trials already have had on our business and reputation," Baumann said.

Bayer shares are down 29% since it closed the Monsanto deal in June 2018. At one point last year as juries ruled against the company, Bayer's market value had fallen below what it paid for Monsanto.

As of April, the company had been sued by 52,500 U.S. plaintiffs who blame glyphosate-based weedkillers for their cancer, up from 48,600 in February. Law firms had lined up tens of thousands of additional claimants with cases yet to serve.

Bayer will continue to sell Roundup, which Monsanto first brought to the market in 1974. It will not add a cancer warning label to the product, a company spokesman said.

Bayer has repeatedly said Roundup is safe and important to farmers who use the herbicide in combination with the company's genetically modified seeds.

Potential future cases will be governed by a class agreement subject to court approval. The agreement includes the establishment of an independent scientific panel that will determine whether Roundup can cause cancer and, if so, at what minimum levels.

Bayer and the plaintiffs are bound by the panel's determination and no new lawsuits can be filed while the experts evaluate the science, a process expected to take about four years, Bayer said.

Separately, Bayer agreed to resolve most cases in litigation over waste water contaminated with PCB, which Monsanto manufactured before 1977, for $820 million.

It also came to terms for up to $400 million to resolve lawsuits brought by land owners who say their crops were damaged by neighbors using Bayer's dicamba-based weedkiller. The product is alleged to evaporate easily and waft away from the target field.

+

We use cookies limited for the aims specified in the data policy and in accordance with the legislation. For details please see our data policy.