Bayer opened a Pandora’s box when it acquired Monsanto Co. in 2018. Since acquiring the maker of Roundup weed killer, the multinational pharmaceutical giant has faced lawsuits from nearly 49,000 Roundup users who claim the product causes non-Hodgkin’s lymphoma (NHL).
Now, to make matters worse, Bayer is seeing a new breed of lawsuit emerging from its ill-fated acquisition. According to a March 6 article appearing in Bloomberg, a Bayer AG investor wants to hold the company’s board and top corporate brass accountable for what she calls a “disastrous” acquisition—one that has chipped away at the company’s share value as it sinks perhaps billions of dollars into liability litigation and settlements.
Rebecca Haussmann, the plaintiff in this newest lawsuit, refers to Bayer as having been “engulfed by a tsunami” of litigation related to Monsanto’s Roundup. The investor is demanding compensation and punitive damages. On top of that, she wants the people behind the Bayer-Monsanto deal to pay—personally. Haussmann’s lawsuit includes a demand for disgorgement of pay for the behind-the-scenes executives who made the acquisition happen.
Among the arguments the plaintiff’s attorneys are presenting in this lawsuit is that red flags should have given cause to stop Bayer from acquiring the Roundup maker. For starters, Bayer’s former CEO Marijn Dekkers expressed opposition to the takeover. Furthermore, in 2015, the International Agency for Research on Cancer classified glyphosate (Roundup’s key ingredient) as a human carcinogen. Finally, and most relevant to the investor’s lawsuit, several lawsuits had already been filed against Monsanto by plaintiffs who blamed the weed killer for their development of cancer.
In 2018, when Bayer purchased Monsanto, lawsuits had already been filed against the herbicide maker. In 2019, plaintiffs in such suits were awarded the amounts of: $55 million compensatory, $2 billion punitive for a San Francisco couple that contracted NHL after using the glyphosate-based weed killer; $80 million for another plaintiff; and $289 million (later reduced to $78 million) for yet another.
Bayer purchased Monsanto for $63 billion. Since then, early losses at trial lead a Bloomberg Intelligence analyst to estimate that settlements will cost between $10 billion and $13 billion.
Haussmann says the verdicts drove a collapse of Bayer’s market capitalization by more than $60 billion. The financial impact has not only eliminated any value from the Monsanto acquisition, but also hurt Bayer shareholders.
Ongoing Roundup litigation may force Bayer to sell its assets, borrow money, or issue equity. The company’s CEO has also announced he will leave the company in April 2020.
Meanwhile Bayer continues to insist that Roundup is safe. The lawsuits continue.