Posted: June 25th, 2020
Bayer, the German drugs and pesticides producer, has come to a $10.9bn agreement to settle thousands of US-based legal actions that were taken as users of weedkiller RoundUp alleged that it played a part in them suffering from cancer. The announcement comes following settlement talks that have lasted for more than one year.
Bayer has always dismissed allegations that the development of cancer is caused by Roundup or its active ingredient glyphosate. This was following a number of independent studies that supported the contention that the weedkiller is safe for human use. The original legal action filed alleged that Roundup was a significant factor in the development of non-Hodgkin’s lymphoma and other cancers in some users.
Bayer purchased Monsanto in 2018 and, in doing so, inherited the claims. This settlement does not take into account three cases that have already gone to trial. In April, shareholders in the group gave their approval to how the claims were being dealt with.
Bayer chief executive Werner Baumann released a statement which revealed that the company are happy that they can now look to moving on to the future without the burden of the claims. He said: “First and foremost, the Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end. It resolves most current claims and puts in place a clear mechanism to manage risks of potential future litigation. It is financially reasonable when viewed against the significant financial risks of continued, multi-year litigation and the related impacts to our reputation and to our business.”
In relation to move settle the case he said: “The decision to resolve the Roundu litigation enables us to focus fully on the critical supply of healthcare and food. It will also return the conversation about the safety and utility of glyphosate-based herbicides to the scientific and regulatory arena and to the full body of science.”
A statement was also made available by settlement mediator Ken Feinberg. He revealed that there remains around 25,000 compensation claims to settle. He remarked: “Bayer wisely decided to settle the litigation rather than roll the dice in American court.”
He added: “I predict all the remaining cases will settle within a few months. People are going to want their share of this settlement.”
The RoundUp settlements will be paid for by Bayer using the company’s current free cash flow and the proceeds of the recent sale of its Animal Health portfolio. There were almost 125,000 filed and unfiled claims. The agreed settlement makes up approximately 75% of the claims linked to RoundUp. In each of the next two years, 2020 and 2021, $5bn is due to be paid out.