Bayer, after more than a year of talks, agreed to pay as much as €9.8 billion to settle thousands of U.S. lawsuits claiming that its widely-used weed killer Roundup caused cancer, resolving litigation that has pummeled the company’s share price.
The German drugs and pesticides maker has come to terms with about 75% of the 125,000 filed and unfiled claims overall, it said in a statement on Wednesday of the deal to end legal disputes it inherited with its $63 billion takeover of Monsanto in 2018.
The settled cases over Roundup and other glyphosate-based weedkillers account for about 95% of those currently set for trial, it added.
“The Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end,” Bayer Chief Executive Werner Baumann said.
The company said it will make a payment of $8.8 billion to $9.6 billion to resolve the current Roundup litigation - including an allowance expected to cover unresolved claims - and $1.25 billion to support a separate class agreement to address potential future litigation.
“Bayer is not getting complete relief, but trying to do as much as it can to calm uncertainty,” said Adam Zimmerman, a law professor at Loyola Law School who has followed the litigation. He called the deal creative, adding, “I can see how it’s attractive for Bayer.”
The deal dwarfs previous out-of-court product liability settlements, such as Merck & Co’s $5 billion deal to end litigation over its withdrawn painkiller Vioxx, and Bayer deals worth $2 billion to settle claims of harm caused by its Yasmin and Yaz birth control pills.
Monsanto began selling Roundup in 1974, and while the formulation is no longer patent-protected, Roundup remains widely available.
Bayer shares are down 29% since it close the Monsanto deal in June 2018. At one point last year as juries ruled against the company, Bayer’s market value had fallen below what it paid for Monsanto.
Bayer will continue selling Roundup and will not add a cancer warning label to the product, a company spokesman said.