Judge Sides Against Herbicide Giant Bayer in $2 Billion Ruling


A jury ruled in favor of a Californian couple who accused Bayer’s Roundup weedkiller of giving them cancer.

This verdict, which awarded a massive sum of over $2 billion to the couple, is the largest verdict of its kind to date and represents a significant blow to the company, which previously has been struggling to repair its reputation after last year’s purchase of Monsanto.

This wasn’t the first ruling of its kind against Bayer. In fact, the Californian ruling is now the third straight trial loss for the company in regards to the safety of its weedkiller.

To make matters worse, the company is facing a revolt from shareholders that began earlier this year as the acquisition of Monsanto opened Bayer up to tens of thousands of U.S. lawsuits.

With today’s ruling representing just one case out of these thousands, it’s not surprising that the German pharmaceutical/life sciences company is struggling to dig itself out of an already terrible situation.

The two previous trial losses ended up eliminating over 30 percent of Bayer’s share price, with a massive 9.6 percent loss coming from a single day. An earlier ruling of the case in question, which involved a couple which contracted non-Hodgkin lymphoma, found that the company’s Roundup weedkiller played a pivotal role in triggering the health condition.

“The shares will likely remain depressed until there is evidence of Bayer prevailing in one or more of the six cases to go to trial in 2019,” said Peter Verdult from Citigroup at the time. Another disgruntled Bayer shareholder and expert in corporate governance, Christian Strenger, echoed similar sentiments, adding that the Monsanto acquisition was a terrible idea that will likely cost billions in the form of legal settlements. “The court judgment is another sign that Bayer has probably not revied a decisive part of the acquisition thoroughly enough.”

Over 55 percent of shareholders refused to endorse Bayer’s management team and their actions over the past year, leading to a massive loss of confidence. According to a shareholder meeting held in late April, shareholders spent over 12 hours criticizing CEO Werner Baumann’s decision to acquire Monsanto, which cost the company $63 billion to purchase.

Major wholesalers like Costco have already pulled Roundup from its shelves, yet despite this, sales for the weedkiller haven’t suffered too much from the litigation. In fact, one retailer that markets Roundup to garden stores across the U.S. said that sales have increased by 20 percent in the first quarter compared to the same time last year.

Shares of Bayer have fallen 2.8 percent in response to today’s news. Having first fallen substantially in March, shares of the German company have failed to recover since the decline, hovering between $16 to $17 per share in comparison to the $20 to $22 range it was trading in before.

Bayer Company Profile

Bayer is a German healthcare and agriculture conglomerate. Healthcare provides over half of the company’s sales and includes pharmaceutical drugs as well as vitamins and animal health products.

The company has a crop science business that includes seeds, pesticides, herbicides, and fungicides, which was expanded through the acquisition of Monsanto. – Warrior Trading News