Bayer, the German drugs and pesticides maker which purchased Monsanto during 2018, has agreed to pay as much as $10.9bn to settle thousands of US-based legal actions taken in relation to users of weed killer Roundup developing cancer.
Three cases that have already gone to trial are not included in the settlement. $5bn of the settlement is due to be paid before the end of 2020, with the same amount being paid the following year. The settlement will be financed using the the company’s existing free cash flow and the proceeds of the recent sale of its Animal Health business.
This settlement represents around three quarters of the claims taken in relation to Roundup and is the result of talks that have lasted more than one year. The claims, almost 125,000 filed and unfiled, were inherited by Bayer when they purchased Monsanto in 2018.
The allegations that were made by former Roundup users included that glyphosate is to blame for their non-Hodgkin’s lymphoma and other cancers. However, Bayer, denies glyphosate is a carcinogen and this contention is backed up by the U.S. Environmental Protection Agency.
In relation to the settlement Bayer chief executive Werner Baumann commented: “The Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end.” The settled cases connected with Roundup use and other glyphosate-based weedkillers account for about 95% of those currently set for trial.
The settlement figure includes $1.25 billion to support another class agreement in relation to possible future litigation and another allowance that makes provision for unresolved claims.
Bayer has consistently denied allegations that Roundup or its active ingredient glyphosate can lead to cancer based on the many years of independent research which say that the product is safe for human use. In April Bayer regained shareholder approval for its handling of the litigation.
Settlement mediator Ken Feinberg revealed that 25,000 claims remain unsettled and, due to this, there will be more trials as cases settle in coming months. He commented: “Bayer wisely decided to settle the litigation rather than roll the dice in American court.”
Monsanto put Roundup on the market during the 1970s. Bayer also said that they will not be adding a cancer warning label on the product.