Bayer inherited the litigation after it acquired Monsanto Co in 2018, the original maker of the herbicide Roundup.
The resolution will allow Bayer to settle tens of thousands of lawsuits filed in the United States, alleging Roundup causes cancer.
Werner Baumann, CEO of Bayer, said regarding the settlement, “It resolves most current claims and puts in place a clear mechanism to manage risks of potential future litigation.”
Baumann called the settlement “financially reasonable” and said it allows the company to “focus fully on the critical supply of healthcare and food.”
Bayer is not admitting to any wrongdoing and will keep on selling Roundup as it claims that the active ingredient in the formulation does not cause cancer.
Why It Matters
According to Bayer, the resolution will bring closure to nearly 75% of cases involving Roundup spanning approximately 125,000 filed and unfiled claims.
Bayer said it is setting aside between $8.8 billion to $9.6 billion to cover agreements it has signed and those under negotiation with plaintiffs.
The company is also earmarking $1.25 billion to pay for a separate class agreement that addresses future litigation.
Bayer investors have been wary about litigation and the associated costs after Bayer purchased Monsanto, reported the WSJ.
There is still room for further litigation, and more lawsuits can be filed against the multinational pharmaceutical giant.
Bayer also settled two other Monsanto cases Wednesday involving a different weedkiller and a banned toxic chemical.
On Wednesday, Bayer OTC shares closed 0.74% higher at $20.54. The company’s shares traded 0.59% higher at $79.14 in Frankfurt at press time on Thursday.
Image by Wikimedia