Bayer announced that it has reached agreements on many of the 125,000 Roundup combinations

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Bayer AG has entered into verbal agreements to resolve a substantial part of approximately 125,000 American cancerslawsuits regarding the use of its Roundup weed killer, according to people familiar with the negotiations.

The agreements, which have yet to be signed and cover around 50,000 to 85,000 combinations, are part of a$ 10 billion Bayer plans to end costly legal battle the company inherited when acquiredMonsanto in 2018, people said. While some lawyers are still pending, payments for cases will range from a few million to a few thousand each, said the people, who asked not to be identified because he is not allowed to speak in public.

Bayer is expected to announce the regulations, which must be approved by the supervisory board, in June, people familiar with the negotiations said. None of the agreements have been signed, although the plaintiffs’ lawyers are expected to do so on the day of the announcement, people said.

Stocks gained 8.2% on Monday at 11:10 a.m. in Frankfurt trading.

Why Bayer’s stocks face such trials during the roundup: QuickTake

Going beyond the Roundup drama is a top priority for CEO Werner Baumann, who orchestrated the $ 63 billion Takeover of Monsanto and has suffered legal consequences since then. Soaring Roundup claims, along with three major U.S. court losses, hammered out the company’s actions, wiping out tens of billions of dollars in market value and prompting shareholders to issue Baumann an unprecedented reprimand in the spring. latest.

But since last summer, the CEO has prevented the company from participating in other jury trials while engaging in high-stakes mediation talks. Last month, it won the annual confidence vote of 93% of shareholders amid signs that Bayer may soon reach a resolution.

“A settlement of all American trials for $ 10 billion should be a major trigger for Bayer’s share price, “Baader Bank analyst Markus Mayer said on Monday.

Once the resolution is in place, Baumann will have to prove that his strategy of combining pharmaceuticals, consumer health and agriculture makes sense. Some investors have doubts about the approach.

Bayer declined to comment on the details of the talks. Chris Loder, a U.S.-based spokesperson, said Friday that the company has made “progress in mediation” as a result of the lawsuits. “The company will not speculate on the results or timing of the settlement,” said Loder in an emailed statement. “As we said before, the company will consider a resolution if it is financially reasonable and provides a process for resolving potential future disputes.”

Read more: Bayer’s Roundup challenge is to avoid “nuclear” jury awards

While the exact number of settlements to date has not been immediately clear, the estimate of at least 125,000 claims is more than double the number of Roundup cases that Bayer has previously disclosed. In April, the company recognized only 52,500 files filed and served. Tens of thousands more are pending by lawyers for the plaintiffs as part of deals with Bayer, people close to the negotiations said. Ken Feinberg, Roundup’s chief mediator, said in January that the total was 85,000 and would likely increase.

Bayer said it would affect $ 8 billion to resolve all pending cases, including those pending, according to some people familiar with the settlements. So far, the transactions have involved many of the strongest claims against the company, people have said. It is unclear how much money would go to those who have now settled and what remains for delays. Another $ 2 billion will be reserved to cover future combinations linking the herbicide to non-Hodgkin’s lymphoma, said people familiar with the talks.

Always sold

Under the terms of the agreements, Roundup will continue to be sold in the United States for use in backyards and farms without any safety warnings, and counsel for the complainants will agree to stop taking new cases or doing any advertising for new customers, people said. Because some of the Roundup cases are being brought up before United States District Judge Vince Chhabria in San Francisco, he may need to approve the settlement of those before him, the people said.

Certainly, with tens of thousands of unresolved cases, there is no guarantee that the company will remain in the $ 8 billion it budgeted for pending and pending lawsuits. Bayercomplicated cases were canceled last month and demanding lawyers are taking fewer because of losses related to the Covid-19 pandemic. This could encourage more lawyers to withdraw their cases from the settlement, people said.

Feinberg, the Washington-based lawyer hired by Chhabria to oversee settlement negotiations, said last week that he remained “cautiously optimistic about a national settlement. He acknowledged that the fallout from Covid-19 “slowed the momentum” on the talks.

Cancer claims

The regulations are intended to resolve claims that Roundup, the active ingredient of which is the chemical glyphosate, has caused non-Hodgkin’s lymphoma in some users. The company denies that Roundup or glyphosate cause cancer, a position supported by the United States Environmental Protection Agency. Yet after Bayer’s court losses sparked new lawsuits, investors such as Elliott Management Corp. urged the company to seek a comprehensive settlement.

Feinberg dispatched mediators to oversee meetings between Bayer’s lawyers and the individual plaintiffs, who negotiated only on behalf of their clients. The company has developed different payment schedules, but none will exceed three years, people said.

At this point, only a handful of lawyers are waiting for larger payments, people said.James Onder, a St. Louis-based lawyer who handles more than 24,000 Roundup cases, said last week that he rejected settlement offers that would leave his clients as little as $ 5,000 each.

Bayer’s overtures “have been insulting,” Onder said in an interview. The company is trying to “arm the most vulnerable in our society to accept tiny settlements, hoping they will fear out of fear at the repeated threats of Monsanto’s bankruptcy.” Onder said he was preparing for trials in Saint Louis next year.

Those familiar with the talks said that Bayer’s lawyers had used the threat of bankruptcy of Monsanto to get people to accept lower payments. Other companies – of whichPurdue Pharma LP – has filed for Chapter 11 protection from creditors to deal with an emerging wave and lawsuits regarding its opioid pain reliever OxyContin.

Verdict of challenges

In a surprising move, Bayer is also continuing appeals of the first lost cases in court, people said. In total, the juries in three trials ordered the company to pay a $ 2.4 billion in damages. The judges subsequently reduced these prices to $ 191 million.

Roundup’s first verdict came from a state court jury in California, which held Monsanto responsible for a groundkeeper’s lymphoma in 2018 and assigned him $ 289 million in damages. A judge then cut this to $ 78.5 million. The oral arguments are scheduled for June 2 in San Francisco.

Refusing to include previous verdicts in the settlement can be designed to send a signal about future allegations that Bayer will not just roll over and pay, said Carl Tobias, a professor at the University of Richmond, a legal specialist collective civil liability.

“It is said that they will fight through the calls, which can take years to resolve,” said Tobias. “In the meantime, people will die.”

The agreements also limit eligibility for payment for cases of non-Hodgkin’s lymphoma and those where complainants have died from this specific cancer in the past decade, according to a Bayer condition sheet reviewed inJanuary by Bloomberg News. Roundup users who blame the product for causing their multiple myeloma cancers receive nothing under the regulations.

The consolidated case is In re: Roundup Products Liability Litigation, MDL 2741, U.S. District Court, Northern District of California (San Francisco).

– With the help of Joel Rosenblatt

((Update actions, add CEO from fifth paragraph)

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