Oh, to be a fly on the wall in Bayer AG Corporation’s conference room recently. You think the German pharmaceutical giant’s CEO, Werner Baumann, regrets buying Monsanto back in 2018 for $63 billion?
Add to the takeover price tag another $10 billion: Bayer, facing approximately 125,000 lawsuits over Monsanto’s cancer-causing popular herbicide, Roundup, agreed verbally to resolve the mass tort.
The silver lining for Baumann and Bayer AG shareholders is that the company’s share value leaped over 8% yesterday on the German stock market. This despite the fact that the board of Bayer AG needs to approve the $10 billion agreement (which will likely happen).
Despite the good news for Bayer AG shareholders, the tidal wave of lawsuits erased billions of dollars in gains for the company. The lawsuits allege that glyphosate, the active ingredient in Roundup weed killer, causes non-Hodgkin’s lymphoma (NHL), as well as other cancers, including leukemia and brain cancer.
As for how much each of the litigants will receive, the value will range from the thousands to the millions.
What’s Next For Bayer AG?
Bayer AG has yet to officially announce the $10 billion collective payout agreement. The company will wait until the board approves it, which will likely take place sometime next month.
To date, Bayer AG has budgeted $8 billion to settle current cases, the number of which is approximately 85,000. The remaining 40,000 cases are in abeyance (cases that are in a holding pattern). This means that the remaining $2 billion will be set aside for the future suits. According to Bloomberg News, the future trials will focus on the link between Roundup weed killer and non-Hodgkin’s lymphoma.
In the meantime, despite the numerous lawsuits and the fact that some U.S. states and at least 24 countries have banned the use of glyphosate, Roundup is still commercially available in the U.S. and Canada. Despite the tens of thousands of lawsuits, the Environmental Protection Agency (EPA) maintains that glyphosate does not cause cancer. As such, Bayer AG is not required to place a warning label on Roundup.
Bayer AG’s ability to keep selling Roundup was part of the verbal agreement. Also part of the agreement: plaintiff’s attorneys will no longer advertise for new litigants or take on new Roundup cases.
One case that will likely continue involves a St. Louis attorney, representing over 24,000 cases. Mediators representing Bayer AG offered the attorney only $5,000 per client in some cases. The attorney turned down the settlement offer.
Bayer AG also is appealing the first few cases it lost. This means that Bayer AG is not setting aside the nearly $200 million from those first three cases in the $10 billion it has budgeted for the Roundup lawsuits.
Not All Roundup Users With Cancer Covered
Per the Bloomberg report, the settlement agreement only covers consumers who died from non-Hodgkin’s within the last 10 years. For users of the weed killer who developed multiple myeloma, a cancer in white blood cells that forms in bone marrow, not one cent from the $10 billion that Bayer AG has set aside for the lawsuits will go to them.