Bayer, the German drugs and pesticides producer has come to an agreement, following over a year of talks, to pay as much as $10.9bn to settle thousands of US-based legal actions taken in connection with users of weed killer Roundup developing cancer.
Bayer, the group that inherited the claims when it took over Monsanto in 2018, revealed in May that talks were coming close to an end. Three cases that have already gone to trial are not included in the settlement.
Of the settlement, $5bn must be paid prior to the end of 2020, with the same amount being paid in 2021. The settlement will be funded using the the company’s existing free cash flow and the proceeds of the recent sale of its Animal Health portfolio.
This settlement represents around three quarters of the claims taken in relation to RoundUp. There were almost 125,000 filed and unfiled claims.
Legal claims submitted stated that Roundup is to responsible for the development of non-Hodgkin’s lymphoma and other cancers in some users. However, Bayer refuted these claims and are supported in these claims by the U.S. Environmental Protection Agency.
In relation to the settlement Bayer chief executive Werner Baumann released a statement which said: “The Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end.”
He went on to say: “It is financially reasonable when viewed against the significant financial risks of continued, multiyear litigation and the related impacts to our reputation and to our business.
“The decision to resolve the Roundup litigation enables us to focus fully on the critical supply of healthcare and food. It will also return the conversation about the safety and utility of glyphosate-based herbicides to the scientific and regulatory arena and to the full body of science.”
The settlement figure takes into account $1.25 billion for another class agreement in relation to possible future litigation and any other unresolved claims.
Bayer has always denied claims that Roundup or its active ingredient glyphosate can result in cancer based on the many years of independent studies being completed that indicate the product is safe for human use. In April the group were given Bayer shareholder approval in relation to its handling of the claims.
Settlement mediator Ken Feinberg also released a statement that revealed some 25,000 claims remain unsettled. He commented: “Bayer wisely decided to settle the litigation rather than roll the dice in American court.”