Bayer shares drop €16bn in value on weedkiller crisis

Bayer shares drop €16bn in value on weedkiller crisis
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Naomi Kresge

Bayer shares continued their slide yesterday after the company failed to block California’s move to list its weedkiller Roundup as a known carcinogen. Bayer’s shares dropped up to 6.5% in Frankfurt and the shares are down 18% in the past year.

The company has lost about €16bn in market value this week, since a US jury’s award in the Roundup case.

The California Supreme Court declined earlier this week to hear arguments by Monsanto, recently acquired by Bayer, as to why Roundup, the world’s most widely used weed killer, doesn’t belong on the state’s list of chemicals known to cause cancer.

The California Court of Appeal, Fifth District, had rejected the US company’s arguments in April. Bayer’s €55.4bn purchase of Monsanto has opened the German drugmaker up to legal risks.

A San Francisco state jury last week awarded a former groundskeeper $289m (€255m) on his claim that exposure to Roundup caused his cancer, and thousands of additional cases are pending.

Meanwhile, Bayer is also facing lawsuits in the US over dicamba, another weed killer in Monsanto’s portfolio.

Like Roundup, dicamba is sprayed on fields that have been planted with seeds that are resistant to the chemical. Farmers say it has harmed adjacent crops after drifting over from fields planted with the resistant seeds.

BASF and Dow DuPont also make dicamba.

“The perception is that a huge wave of lawsuits and penalty payments are rolling toward Bayer,” said Markus Mayer, an analyst with Baader Bank.

“This sentiment is right now what you see in the share price,” he said.

Bayer said it believes US courts ultimately will find that glyphosate, the main ingredient in Roundup, wasn’t responsible for the cancer of the California school groundsman who was the plaintiff in last week’s case.

It’s planning an appeal.

Monsanto has insisted for decades that glyphosate is safe. Bayer said it previously had been barred from steering Monsanto’s legal strategy. That will now change as the stakes mount in the battle over Roundup.

Even if a judge overturns or reduces the award, the trial will probably be the first of many: More than 5,000 US residents have joined similar suits.

Bloomberg

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