Roundup weedkiller. The deal relieves a major headache for Bayer, going on since it bought US firm and Roundup maker Monsanto for $63 billion in 2018 (AFP Photo/Odd ANDERSEN) |
Frankfurt am Main (AFP) - German chemical giant Bayer said on Wednesday it had agreed to pay more than $10 billion to end a wave of lawsuits from Americans who say their cancers were caused by its Roundup weedkiller.
The deal
relieves a major headache for Bayer, which has been going on since it bought US
firm and Roundup maker Monsanto for $63 billion in 2018.
"The
Roundup settlement is the right action at the right time for Bayer to bring a
long period of uncertainty to an end," said CEO Werner Baumann in a
statement.
At the same
time Bayer announced it had also agreed separate multi-million-dollar payouts
to resolve longstanding legal issues involving other Bayer products, as the
group tries to turn the page on its courtroom dramas.
Bayer's
share price climbed nearly six percent to 74.06 euros in after-hours trading
following the surprise announcement.
The Roundup
deal would bring closure to around 75 percent of current litigation that
involves roughly 125,000 filed and unfiled claims, the statement said.
It would
also settle about 95 percent of the cases currently set for trial and establish
"key values and parameters" to resolve the remainder of the claims,
Bayer added.
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'Hard-fought battle' -
Roundup is
a flagship Monsanto product containing glyphosate, a widely used weedkiller
that tens of thousands of plaintiffs say caused their illness -- with many
suffering from the blood cancer non-Hodgkin's lymphoma.
Bayer
suffered a clutch of financially painful setbacks in first-instance US court
rulings last year, although the amounts awarded were later reduced.
The legal
woes have weighed heavily on the group's share price with many observers and
investors questioning the wisdom of the Monsanto takeover.
Jennifer
Moore, a lawyer representing several Roundup plaintiffs, welcomed the deal.
"This
settlement is significant for our clients because this has been a long,
hard-fought battle and it brings justice for our clients," she told AFP.
Bayer
maintains that scientific studies and regulatory approvals show Roundup's main
ingredient glyphosate is safe, but said when it released first-quarter earnings
data in April that it "continues to engage constructively in the mediation
process".
The settlement
announced on Wednesday consists of a payment of $8.8 billion to $9.6 billion to
resolve the current Roundup litigation, Bayer said, and $1.25 billion to
address potential future litigation.
Bayer
stressed that the agreement would not cover three cases currently going through
the appeals process.
They
include the landmark first Roundup case brought by school groundskeeper Dewayne
Johnson who was eventually awarded $78.5 million.
Dicamba
deal
In the same
statement, Bayer said it would pay $820 million to settle decades-old
complaints over Monsanto-made toxic chemicals known as PCBs that caused water
contamination.
It also
agreed to settle US lawsuits involving dicamba herbicide which has been blamed
for wrecking crops in America, by drifting on to plants unable to resist it.
The group
said it would pay up to $400 million to resolve pending claims in Missouri for
the 2012-2015 crop years.
Bayer said
it expects co-defendant BASF -- which also manufacturers a type of dicamba --
to contribute towards the settlement.
It comes
after a US jury in February awarded $265 million to Missouri peach farmer Bill
Bader who accused the two companies of encouraging farmers to use the
weedkiller irresponsibly.
Bayer said
the Bader case was not included in the proposed settlement.
"The
company believes the verdict in Bader Farms is inconsistent with the evidence
and the law and will continue to pursue post-trial motions and an appeal, if
necessary," it said.
Bayer said
it would make the first cash payments related to the mass settlements starting
this year. Part of the funds will come from the sale of its profitable animal
health unit.
"All
three settlements are in the best interest of the company and our
stakeholders," said supervisory board chairman Norbert Winkeljohann.
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