Bayer agrees to $10.9 billion plan to settle Roundup claims

Bayer agrees to $10.9 billion plan to settle Roundup claims

Roundup was originally launched by United States firm Monsanto, which was bought by Bayer in 2018.

Global pharmaceutical giant Bayer will spend up to $US10.9 billion ($15.87b) to settle thousands of lawsuits alleging the company's weedkiller, Roundup, causes cancer.

Bayer bought the U.S. firm two years ago for $63bn in a deal now regarded as one of the most disastrous takeovers in corporate history.

"In short, this is the right action at the right time for Bayer", CEO Werner Baumann said during a conference call with reporters. Bayer will pay a total of approximately $650 million to the class.

Bayer's share price climbed almost six percent to 74.06 euros in after-hours trading following the surprise announcement.

The company said the settlement over Roundup, which is made by its Monsanto subsidiary, involves about 125,000 filed and unfiled claims.

The settlement of Roundup cases in the USA "will bring closure to approximately 75% of the current Roundup litigation involving approximately 125,000 filed and unfiled claims overall", Bayer said in a news release.

The company, whose management in April regained shareholder support for its handling of the litigation process, has denied claims that Roundup or its active ingredient glyphosate causes cancer.

In August 2018, a California court issued the first ruling linking Roundup to cancer, awarding claimants substantial compensation.

The legal woes have weighed heavily on the group's share price with many observers and investors questioning the wisdom of the Monsanto takeover.

"The defendant knew or ought to have known the use of Roundup products were unsafe for the plaintiff to use and capable of causing serious injury.in particular causing DNA and chromosomal damage in human cells, cancer, kidney disease, infertility and nerve damage, among other devastating illnesses", the writ said.

Under the agreement, Bayer will make a payment of $8.8 billion to $9.6 billion to resolve current litigation, and $1.25 billion to address potential future litigation. He said in a statement from Bayer that the agreements provide a framework that will enable the parties to bring the current litigation to closure soon.

They include the landmark first Roundup case brought by school groundskeeper Dewayne Johnson who was eventually awarded $78.5 million.

At the time, Monsanto maintained that glyphosate - the active weed-killing ingredient in Roundup - had a history of safe use, a stance that Bayer has since echoed. Dicamba has also now been banned in America.

Bayer officials also agreed to pay $400 million to resolve claims that its dicamba herbicide drifted onto the fields of neighboring farmers and damaged their crops.

The company said it expects contributions from co-defendant BASF toward the dicamba settlement.

Brett Begemann, chief operating officer at Bayer's crop science division, said on Thursday the company continues to "proudly stand behind" the safety and utility of its products.

"The company believes the verdict in Bader Farms is inconsistent with the evidence and the law and will continue to pursue post-trial motions and an appeal, if necessary", it said.

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