German chemical giant Bayer AG on Wednesday said it had agreed to pay more than US$10 billion to end a wave of lawsuits from Americans who say their cancers were caused by its Roundup weedkiller.
The deal relieves a major headache for Bayer, which has been going on since it bought US firm and Roundup maker Monsanto Co for US$63 billion in 2018.
“The Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end,” CEO Werner Baumann said in a statement.
At the same time, Bayer announced it had also agreed to separate multimillion-dollar payouts to resolve longstanding legal issues involving other Bayer products, as the group tries to turn the page on its courtroom dramas.
Bayer’s share price climbed nearly 6 percent to 74.06 euros in after-hours trading following the surprise announcement.
The Roundup deal would bring closure to about 75 percent of current litigation that involves about 125,000 filed and unfiled claims, the statement said.
It would also settle about 95 percent of the cases currently set for trial and establish “key values and parameters” to resolve the remainder of the claims, Bayer added.
Roundup is a flagship Monsanto product containing glyphosate, a widely used weedkiller that tens of thousands of plaintiffs say caused their illness — with many suffering from non-Hodgkin’s lymphoma.
Bayer last year faced a group of financially painful setbacks in first-instance US court rulings, although the amounts awarded were later reduced.
Jennifer Moore, a lawyer representing several Roundup plaintiffs, welcomed the deal.
“This settlement is significant for our clients because this has been a long, hard-fought battle and it brings justice for our clients,” she said.
Bayer maintains that scientific studies and regulatory approvals show Roundup’s main ingredient glyphosate is safe, but said in April when it released first-quarter earnings data that it “continues to engage constructively in the mediation process.”
The settlement consists of a payment of US$8.8 billion to US$9.6 billion to resolve the current Roundup litigation, Bayer said, and US$1.25 billion to address potential future litigation.
Bayer said that the agreement would not cover three cases currently going through the appeals process.
They include the landmark first Roundup case brought by school groundskeeper Dewayne Johnson who was eventually awarded US$78.5 million.
In the same statement, Bayer said it would pay US$820 million to settle decades-old complaints over Monsanto-made toxic chemicals known as PCBs that caused water contamination.
It also agreed to settle US lawsuits involving dicamba herbicide which has been blamed for wrecking crops in the US, by drifting on to plants unable to resist it.
The group said it would pay up to US$400 million to resolve pending claims in Missouri for the 2012 to 2015 crop years.
Bayer said it expects codefendant BASF AG — which also manufacturers a type of dicamba — to contribute toward the settlement.
It comes after a US jury in February awarded US$265 million to Missouri peach farmer Bill Bader who accused the companies of encouraging farmers to use the weedkiller irresponsibly.
Bayer said it would make the first cash payments related to the mass settlements starting this year.
Part of the funds would come from the sale of its profitable animal health unit.
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