Bayer pledges to fix legal woes surrounding weedkiller Roundup
Bayer faces thousands of lawsuits in the US claiming that Bayer’s blockbuster weedkiller Roundup causes cancer .
Bayer has forecast another year of falling profit and opted to stick with its conglomerate structure for now as it works to get on top of billions of dollars of legal woes that threaten the company’s long-term future.
The German crop sciences to pharma business, whose value has plunged by more than 70% since the $63bn (€58bn) acquisition of Monsanto, said that splitting the business might seem like a quick fix to its multitude of problems, but it would likely make them worse.
New chief executive Bill Anderson drew a parallel between the state of Bayer and a skateboarding accident that shattered his leg. The immediate need, he said, is to fix the damage, listing four “broken areas” that include thousands of lawsuits in the US claiming that Bayer’s blockbuster weedkiller Roundup causes cancer.
Core earnings may drop as low as €5.10 a share in 2024 from €6.39 last year, Bayer said in a statement, lower than analysts anticipated. Sales are also expected to decline.
“On the question of structure, our answer is ‘not now’ — and this shouldn’t be misunderstood as ‘never,’” Mr Anderson said. “Our priority is on tackling our challenges, boosting performance, and creating strategic flexibility,” he said.
Investors will probably renew calls for a separation of the consumer-health division if Bayer shares don’t recover “noticeably and permanently", Markus Manns, a portfolio manager with Union Investment, a major shareholder, said.
Mr Anderson is working to win back the faith of investors burned by years of poor performance and the damaging effects of the Monsanto deal.
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