Bayer Wins Court Nod for $7.25 Billion Roundup Settlement
Bayer AG said a U.S. judge granted preliminary approval for a $7.25 billion settlement proposal aimed at resolving thousands of lawsuits over Roundup weedkiller, which have weighed on the German company for years.
The class-action settlement, which Bayer proposed in February, is a key part of the company’s plans to cap its obligations by resolving current and future damage claims, with funding running for up to 21 years. Former users of Roundup blame the herbicide for their non-Hodgkin’s lymphoma, an allegation Bayer denies.
Class members have until June 4 to opt out of the settlement, which got preliminary approval from a Missouri state court judge, Bayer said in a statement Wednesday.
Bayer shares pared declines following news of the settlement, closing 2.4% lower in Frankfurt. The shares earlier fell as much as 7.7% after the company issued a disappointing profit outlook.
After years of fighting Roundup cases in the U.S., Bayer is still facing about 65,000 claims from plaintiffs who allege that long-term exposure to glyphosate, the active ingredient in Roundup, caused their cancer. Resolving those and future claims comes at a hefty price, with Bayer projecting settlement payments to result in a negative free cash flow in 2026.
Related: Bayer’s $7 Billion Effort to End Roundup Curse Draws Skepticism
The judge’s approval of the settlement is a positive outcome for Chief Executive Officer Bill Anderson. He took the helm in mid-2023 and was tasked with finding a way to end the protracted litigation that has already cost the company more than $10 billion. The legal troubles have haunted Bayer since it acquired Monsanto in 2018.
His predecessor, Werner Baumann, had failed to clinch a settlement. In 2021, his proposed deal was shot down by a federal judge in San Francisco who cited “glaring errors” in the way the company proposed to handle future Roundup claims, which were limited to a four-year period and had to be vetted by a science panel.
Anderson said his proposed settlement was different. It would cover a longer period for claims to be filed, has a larger funding pool and an opt-out provision for plaintiffs who want to pursue their claims in court.
The decision was made by St. Louis Circuit Judge Tim Boyer, who has overseen several Roundup trials.
“The court’s preliminary approval of the settlement proposal marks an important milestone for Bayer in its efforts to resolve its glyphosate-related risks,” said Markus Manns, portfolio manager at Union Investment, a Bayer investor.
Still, there are some more hurdles. Class members can opt out, and Bayer has the right to terminate the agreement if participation falls short. Anderson has made clear the uptake needs to be “very close” to 100% participation for the framework to work.
Investors are also watching a separate decision of the US Supreme Court, which agreed in January to hear Bayer’s appeal of a $1.25 million Roundup verdict. The high court is set to decide whether claims that it failed to include warning labels on the weedkiller are preempted by federal law and can’t be relied on in future Roundup litigation. Arguments before the justices are scheduled for April 27, with Bayer expecting a decision in the second half of June.
If the Supreme Court rules in Bayer’s favor, the decision could undercut a substantial portion of claims. If it rules against the company, the settlement alone may not be enough to prevent renewed litigation risk.
The opt-in deadline for the settlement means plaintiffs will likely have to decide whether to accept the deal before the Supreme Court rules, according to a company spokesperson.
Top photo: A bottle of Bayer AG Roundup brand weedkiller concentrate is arranged for a photograph in a garden shed in Princeton, Illinois, U.S., on Thursday, March 28, 2019. Bloomberg.