Bayer Shareholder Files Lawsuit Over “Disastrous” Monsanto Acquisition

Published on March 20, 2020 by Sandy Liebhard

A shareholder in Bayer AG has sued the company, asserting its “disastrous” acquisition of Monsanto has exposed the conglomerate to potentially billions in liability from Roundup cancer lawsuits.

Bayer Share Price Slumped on Monsanto Roundup Verdicts

German-based Bayer acquired Monsanto in June of 2018, when the U.S. agribusiness was already facing thousands of lawsuits that alleged glyphosate in Roundup caused users to develop various forms of non-Hodgkin’s lymphoma. Since then, the Monsanto Roundup litigation has grown to more than 43,000 cases nationwide, and three juries have awarded plaintiffs verdicts totaling billions of dollars in damages.

Bayer investor Rebecca Haussmann filed a shareholder lawsuit last Friday in Manhattan Supreme Court, asserting the company “has been engulfed by a tsunami” of litigation related to Roundup. According to the Associated Press, she is seeking compensation and punitive damages, as well as disgorgement of pay for executives central to the Monsanto acquisition.

“These verdicts caused Bayer’s market capitalization to collapse by over $60 billion, wiping out the entire ‘value’ of the Monsanto acquisition, damaging Bayer and its shareholders,” Haussmann’s lawsuit states. “The acquisition is now ranked as one of the worst corporate acquisitions in history.

Monsanto Roundup Settlement Talks Continue

Glyphosate, the active ingredient in Monsanto Roundup, was declared a probable human carcinogen by the World Health Organization in March 2015, after an independent review linked occupational exposure to an increased risk of cancer, especially non-Hodgkin’s lymphoma and its various subtypes.

Recently, Bayer acknowledged that it may have to sell assets, issue new equity or borrow money at unfavorable terms because of the Roundup litigation. The company also agreed to review its rules for mergers and acquisitions in light of the Monsanto debacle.

Although Bayer continues to deny glyphosate causes cancer, the company is participating in court-ordered mediation to reach a global Roundup settlement. Several upcoming trials have been postponed to facilitate the talks, and reports suggest the parties are nearing a settlement in the neighborhood of $10 billion.

Earlier this month, Werner Wenning, Bayer’s CEO and a major architect of the Monsanto acquisition, announced he would be stepping down in April. In announcing his departure, Wenning noted that Roundup settlement talks were progressing well.