Bayer takes additional $4.5 billion charge for Roundup suits
Jul 28, 2021, 8:16 PM | Updated: Jul 29, 2021, 8:17 am
FRANKFURT, Germany (AP) — German pharmaceutical and chemical company Bayer said Thursday it would take a provision of $4.5 billion against second-quarter earnings to put the company on what it said would be a path to closure of thousands of U.S. lawsuits over a weedkiller containing the chemical glyphosate.
The company said would continue to pursue legal appeals at the U.S. Supreme Court and was hopeful of success.
But it set aside the money to account for a second scenario in which it has to manage the costs of the remaining claims through a mix of litigation and settlement. The company has faced thousands of legal actions from people claiming that glyphosate causes non-Hodgins lymphoma, a type of cancer.
“We want to provide comfort to our investors that the glyphosate litigation exposure should now be reasonably accounted for and leaves significant upside in the event of a favorable Supreme Court decision on the case,” CEO Werner Baumann said during a conference call with investment analysts.
“It is important for the company, our owners, and our customers that we move on and put the uncertainty and ambiguity related to the glyphosate litigation behind us.”
Bayer inherited Roundup and the litigation by acquiring Monsanto in 2018.
The $4.5 billion comes on top of around $9.6 billion in earlier litigation set-asides. The company says the compound is safe.
The company additionally said that it would replace glyphosate in its Roundup weedkiller with other ingredients when it comes to sales for the U.S. residential lawn care market from 2023, subject to regulatory review of the new ingredients. That is where most of the court cases have come from.
Bayer said replacing glyphosate was aimed at managing litigation risk and was not based on any safety concerns. Products containing glyphosate will still be available for professional and farm use.
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