More weedkiller lawsuits but this time it’s not Roundup

The first US trial over a herbicide called dicamba has landed Bayer and its German rival BASF with another potentially multi-billion problem.

Jurors in federal court in Cape Girardeau awarded $265m (€245m) on Saturday to a Missouri farmer who blamed the herbicide for destroying his peach orchards.

The companies now face more than 140 lawsuits over allegations that dicamba wreaked havoc across the Midwestern US when it drifted onto crops that weren’t engineered to resist it.

While two German industrial giants are involved, the focus is set to fall on Bayer, already seeking to settle thousands of lawsuits claiming exposure to its Roundup weedkiller causes cancer.

Both dicamba and Roundup are produced by Monsanto, which Bayer acquired in 2018.

The loss heaps more pressure on Bayer chief executive Werner Baumann, who staked his career on the $63bn (€58bn) takeover of Monsanto.

Last April, after a couple of Roundup trial losses, Mr Baumann became the first CEO of a major German company in decades to lose a shareholder confidence vote.

Activist investor Elliott Management later announced the purchase a stake in the company, raising the prospect of holders pushing to split up the pharma and agro-chemicals conglomerate.

Mr Baumann, a defender of that setup, faces another shareholder vote in April. Since dicamba is another legacy Monsanto product, the latest verdict threatens to undo Bayer’s recent momentum.

Since June, the shares have recouped about half of the value they lost following the Roundup trial losses. Bayer shares fell 2.5% in Frankfurt trading in the latest session, the sharpest drop in more than four months.

The ruling is “a negative for sure” though dicamba will probably not grow into a headache as big as Roundup, according to Dennis Berzhanin, an analyst at Pareto Securities in Frankfurt.

The company vowed to appeal, saying “there was no competent evidence presented which showed that Monsanto’s products were present” on the Missouri farm and were responsible for the farmer’s losses.

BASF said it was surprised by the jury’s decision and would use “all legal remedies available.”

The stock dropped less than 1% in Germany.

Bev Randles, one of Bayer’s lawyers, said the verdict sends a message to all US corporations.

“There is no giant too big,” she said. “Everyone has to follow the law.”

- Bloomberg