Bayer AG agreed to pay as much as $10.9bn to settle thousands of United States lawsuits claiming that its widely-used weedkiller Roundup caused cancer. The agreements come after a year of talks aimed at resolving legal disputes it inherited with its $63bn takeover of Monsanto in 2018.
The German drugs and pesticides maker has come to terms with about 75 percent of the 125,000 filed and unfiled claims overall, it said in a statement on Wednesday.
The settled cases over Roundup and other glyphosate-based weedkillers account for about 95 percent of those currently set for trial, it added.
“The Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end,” Bayer Chief Executive Werner Baumann said.
The company said it will make a payment of $8.8bn to $9.6bn to resolve the current Roundup litigation – including an allowance expected to cover unresolved claims – and $1.25bn to support a separate class agreement to address potential future litigation.
Roundup litigation has pummeled Bayer shares, wiping billions of dollars off of Bayer’s market value.
Ken Feinberg, who was appointed settlement mediator by a federal judge more than a year ago, said that while nearly 25,000 claims remained unsettled there will be no more trials as cases settle in coming months.
“Bayer wisely decided to settle the litigation rather than roll the dice in American court,” said Feinberg, who has mediated other high-profile disputes, including over the September 11th Victim Compensation Fund, the BP Deepwater Horizon disaster and Volkswagen’s diesel emissions scandal.
Bayer said in February it did not need to write down Monsanto’s value in its books if it has to spend $10bn on a settlement, reflecting the average analyst estimate at the time.
The company, whose management in April regained shareholder support for its handling of the litigation, has denied claims that either Roundup or its active ingredient glyphosate cause cancer, saying decades of independent studies have shown the product is safe for human use.
Bayer said it expects to maintain its investment grade credit ratings and intends to keep its dividend policy.
Monsanto began selling Roundup in 1974, and while the formulation is no longer patent protected, Roundup remains widely available.
Bayer will continue selling Roundup and will not add a cancer warning label to the product, a company spokesman said.
Bayer has repeatedly said Roundup is safe and important to farmers who use the herbicide in combination with the company’s genetically modified seeds.