US settlement: Has Bayer untied the Monsanto knot?

The Leverkusen-based group announced in the evening that it had reached a far-reaching settlement in the US glyphosate litigation involving its subsidiary Monsanto. Subject to approval by a US court, payments of up to 7.25 billion US dollars would be made over a period of up to 21 years. The agreement is intended to settle both pending and potential future claims linked to the weedkiller Roundup.

Legal certainty instead of prolonged litigation

The payments are capped and designed to decline over time. Bayer expects this to provide greater financial predictability and improved control over legal risks. Claimants’ law firms have applied to the competent court in St. Louis, Missouri, for preliminary approval of the class settlement.

The move was well received on the US stock market, where Bayer shares at times rose by more than seven per cent. Chief Executive Bill Anderson described the agreement as a clear path to reducing long-standing legal uncertainties. At the same time, the company stressed that the settlement does not constitute an admission of liability and maintains that the allegations concerning glyphosate remain unfounded.

For Bayer AG, which has recently staged a marked turnaround driven in part by progress in its pharmaceuticals division, such a resolution could nevertheless prove a significant relief. Whether the US court will grant its approval remains the decisive question.