Bayer Eyes Deal to Pay More Than $7 Billion in Roundup Cases (1)

Bayer AG agreed to pay more than $7 billion as part of a major push to resolve current and future cancer lawsuits over its top-selling Roundup weedkiller in a settlement plan to turn the page on litigation that has ensnared the company for years.

The German conglomerate proposed a $7.25 billion class-action settlement through cases filed in state court in Missouri designed to resolve Roundup suits that already have been filed and potential claims that could be filed over a 21-year period, the company said.

As part of the effort, Bayer has reached separate settlements worth at least $3 billion of existing US cases in which former Roundup users blame the herbicide for causing their non-Hodgkin’s lymphoma, according to people familiar with the deals. Among the cases settled was a $2.1 billion verdict handed down by a state-court jury in Georgia last year, said the people, who asked not to be named discussing the confidential agreements.

Bayer’s shares rose as much as 8.4% in Frankfurt after the news, the biggest gain since December. The company’s shares have risen more than 130% over the last year.

Bayer is making the move after the US Supreme Court agreed last month to hear its appeal of a $1.25 million Missouri jury verdict against the company’s Monsanto unit over Roundup on the grounds some of the claims in the 2023 case were preempted by federal law.

“The proposed class settlement agreement, together with the Supreme Court case, provides an essential path out of the litigation uncertainty,” Bill Anderson, Bayer’s chief executive officer, said Tuesday in a release.

Roundup litigation has plagued the German conglomerate since it bought Monsanto for more than $60 billion and inherited a string of suits that have cast a lingering cloud over its shares. The company already has paid more than $10 billion in verdicts and settlements over the herbicide.

After years of fighting Roundup cases in the US, Bayer still faces about 67,000 claims from plaintiffs who allege long-term exposure to glyphosate through Roundup caused their cancer. Bayer officials have steadfastly insisted the weedkiller is safe. The company removed the glyphosate-based version from the US residential market in 2023.

The US Environmental Protection Agency has found that glyphosate is “unlikely to be a human carcinogen.” The US Food and Drug Administration has a role in ensuring that pesticide chemical residues don’t exceed EPA standards.

The litigation has cast such a pall over Bayer that Anderson has said he’s weighing whether to stop making glyphosate altogether.

“This proposed settlement represents a historic step toward bringing justice and financial relief to thousands of people across the country who developed non-Hodgkin lymphoma after exposure to Roundup,” said Chris Seeger, a lawyer representing people with Roundup claims. “After years of intense litigation and uncertainty, this agreement provides a clear, streamlined path to compensation.”

Under terms of the proposed settlement deal, Bayer hopes to entice former Roundup users who could file a claim and review a compensation offer. People can opt out of the deal and take their cases to trial in the regular court system, Bayer officials said Tuesday. Monsanto will have the right to terminate the settlement without payment of claims if the number of opt-outs is excessive, Bayer’s head of litigation Bill Dodero said on a call with investors Tuesday.

It’s important that former Roundup users who may file claims down the road be part of the settlement “or we won’t have a deal,” Anderson said on the call. He said he expects the “vast majority” of future cases to be covered with the accord, though he declined to give details or say how much claimants would get. The settlement requires final court approval.

While praising Bayer’s settlement efforts, some investors doubted whether the Missouri class would attract significant numbers of future claimants. “Bayer has likely extracted the best possible outcome from a highly complex situation, but this does not yet represent the decisive breakthrough many investors had hoped for,” said Markus Manns, portfolio manager at Union Investment, a Frankurt-based asset management firm. “The company’s challenge will be to make the compensation program sufficiently attractive to prevent renewed litigation, while keeping the financial burden within manageable limits.”

Besides the class-action deal, Bayer officials also said Tuesday they’d settled some prior Roundup verdicts and added about $1 billion to its resolutions of suits tied to a Seattle-area school where more than 200 people contend were exposed to toxic chemicals made by the company’s Monsanto unit. The settlements are part of an effort to corral the company’s liabilities for polychlorinated biphenyls, or PCBs, once manufactured by Monsanto.

As a result, the company hiked its litigation provisions to €11.8 billion ($14 billion) from €7.8 billion to cover glyphosate settlements and the PCB-related cases. The payouts will likely lead to a negative free cash flow in 2026, the company said. The immediate financing is secured with a bank loan facility of $8 billion, Bayer said.

Read More: Bayer Eyes Roundup Exit as Cancer Legal Bill Nears $18 Billion

Bayer’s settlement drive comes after winning Supreme Court review of its appeal of cancer patient John Durnell’s verdict in state court in Missouri. In Durnell’s case, jurors found Bayer failed to provide a proper warning about Roundup’s risks even though US regulators didn’t require such a warning.

Bayer argued to the nation’s highest court that failure-to-warn claims brought in state court must yield to the US EPA’s decision not to force Bayer to put a cancer warning on Roundup. Consumer groups have called for US regulators to force Bayer to put a warning on the product or take it off the market.

Many large verdicts against Bayer and Monsanto have been based, in part, on failure-to-warn allegations. The language of state laws governing the claim vary, but Bayer contends the preemption issue supplants all of them.

The German company has struggled to deal with the current and projected future caseload of Roundup suits. Bayer has said publicly it already has resolved more than 130,000 cases, either by settlement or having judges throw them out.

(Updates with comments from investor call starting in 12th paragraph. An earlier version corrected the date of outreach to Bayer.)

--With assistance from Michelle Fay Cortez.

To contact the reporters on this story:
Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net;
Sonja Wind in Frankfurt at swind2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Ben Bain

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