Posted: June 26th, 2020
German drugs and pesticides manufacturer Bayer has, after year long settlement talks, agree to pay a $10.9bn compensation settlement in relation to thousands of US-based legal actions taken as users of weedkiller Roundup claimed it caused them to develop cancer.
The RoundUp settlements will be financed by Bayer with the company’s current free cash flow and the earnings from the recent sale of its Animal Health business. There were almost 125,000 filed and unfiled compensation claims. The agreed settlement makes up about 75% of the claims connected with Roundup. In both 2020 and 2021, $5bn is due to be paid out.
Bayer has never accepted allegations that cancer is caused by Roundup or its active ingredient glyphosate. The company has referred to independent studies that back up this belief. The submitted legal action filed alleged that Roundup was a major factor in the development of non-Hodgkin’s lymphoma and other cancers in some individuals.
Bayer bought 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, a meeting of Bayer shareholders in the group gave their approval to how the claims were being managed.
Bayer chief executive Werner Baumann said, in relation the development and settlement agreement: “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.”
He added: “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.”
Settlement mediator Ken Feinberg said that there are a number of claims, 25,000, remaining to settle, “Bayer wisely decided to settle the litigation rather than roll the dice in American court.”
He went on to say: “I predict all the remaining cases will settle within a few months. People are going to want their share of this settlement.”