What’s Next in Court for Bayer Crop-Chemical Claims

Many Bayer AG investors didn’t realize just how much litigation risk they were getting when the German company spent $66 billion in June to acquire Monsanto Co., the giant U.S. seed and herbicide maker. On Aug. 13, Bayer shares plunged as much as 18 percent -- the most since 2001 -- after a San Francisco jury awarded $289 million to a groundskeeper who said he contracted cancer from Monsanto’s blockbuster weedkiller, Roundup. While Bayer is seeking a mistrial, more than 8,000 additional plaintiffs are making similar claims. And with fresh lawsuits emerging over another Monsanto herbicide, dicamba, investors are left to ponder the final cost of Bayer’s increased legal exposure.

It contains the weed-killing chemical glyphosate, which has become widely used by commercial farmers and home gardeners. Over more than four decades, about 3.5 billion pounds of glyphosate was sprayed in the U.S. The lawsuits were filed after glyphosate was declared a probable human carcinogen in 2015 by the International Agency for Research on Cancer, an arm of the World Health Organization. However, like other regulators around the world, the U.S. Environmental Protection Agency last year said glyphosate isn’t likely to be carcinogenic to humans at current exposure levels. Monsanto developed Roundup in the 1970s, and then created a multi-billion-dollar business around seeds that it genetically modified to resist the chemical.