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Bayer shares rise on potential Roundup settlement

Bayer plans to announce deal this seek where $8 billion is earmarked to resolve all current cases.

By Tim Loh and Jef Feeley

Bayer AG rose as much as 7.3% after Handelsblatt reported that the company is close to a resolution of litigation over its Roundup weedkiller, offering potential relief from one of its biggest threats.

The company’s supervisory board is expected to vote on a package valued at $8 billion to $10 billion in the coming days, the German newspaper reported, citing people familiar with the negotiations and close to the company. Bayer plans to announce the deal this week, Handelsblatt said. The company declined to comment on the report.

Accusations that Roundup caused cancer in some users of the weedkiller have bedeviled Bayer since its $63 billion purchase of the agricultural giant in 2018. Bayer has denied the link and is appealing suits it has lost. Investors have criticized Chief Executive Office Werner Baumann for the acquisition, hitting him with a no-confidence vote last year and longtime Chairman Werner Wenning retired this spring before his term expired.

Last month, Bloomberg reported that Bayer had reached verbal agreements to resolve a substantial portion of an estimated 125,000 U.S. lawsuits over the controversial weedkiller. The company was expected to announce the settlement in June once the supervisory board gave its approval, people familiar with the matter said at the time.

Outstanding cases

Bayer has told plaintiff attorneys that it will earmark $8 billion to resolve all current cases, including those held in abeyance, and will set aside another $2 billion to cover future suits linking the weedkiller to a form of cancer known as non-Hodgkin’s lymphoma, people familiar with the matter said last month.

Handelsblatt reported Tuesday that it appears that all the plaintiff attorneys representing Roundup cases have signed onto the deal. As of early this week, however, a handful of plaintiff attorneys were still holding out for larger payouts, people familiar with the matter have told Bloomberg.

The shares were up 6.2% at 3:57 p.m. in Frankfurt. Bayer has lost a fourth of its value since the Monsanto deal closed.

Some cases are still outstanding that won’t be covered by the possible settlement. A group of lawyers who say they couldn’t reach a deal with the German drug and chemical giant recently filed 13 new suits on behalf of children who’ve developed non-Hodgkin’s lymphoma, a form of cancer some researchers have tied to glyphosate.

Eleven of the new suits were filed in state court in St. Louis last week, while two others were in California, said Fletch Trammell, one of the children’s lawyers, in an interview. They accuse the company of failing to warn about the risks of using the weedkiller in backyards, playgrounds and parks. Trammell’s group of lawyers also has 5,000 Roundup cases not covered by the planned settlement.

“I gave Bayer an opportunity to settle these cases and they weren’t interested in paying a fair resolution to them,” he said. “We are prepared to take these cases to trial to get what we consider to be fair compensation for our clients.”

The new lawsuits were filed on behalf of children ranging in age from five to 17 years old. Most are still battling their cancers, but 13-year-old Jacob Savage of Forks, Washington, died in 2017 from non-Hodgkins lymphoma, or NHL, according to court filings. Other such suits on behalf of children are also pending.

“Bayer has great sympathy for children and adults who are diagnosed with NHL, but the science does not support that Roundup is the cause of this disease,” the company said Monday in a statement about the new suits.

Bayer notched a court victory Monday, though, when a federal judge in Sacramento blocked the state of California from requiring that any company selling a glyphosate-based product place a “clear and reasonable warning” on it. California’s Office of Environmental Health Hazard Assessment listed glyphosate in July 2017 as a chemical known to the state to cause cancer. U.S. District Judge William B. Shubb made final his 2018 preliminary ruling that requiring Bayer to provide that warning on Roundup is a violation of its free-speech protections.

--With assistance from Joel Rosenblatt.
To contact the reporters on this story:
Tim Loh in Munich at tloh16@bloomberg.net;
Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net
To contact the editors responsible for this story:
Kenneth Wong at kwong11@bloomberg.net
John Lauerman, Anne Pollak
© 2020 Bloomberg L.P.
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