By Rachel More
BERLIN (Reuters) -Bayer is lobbying U.S. states to adjust their regulations in the battle to control costly litigation targeting its herbicide glyphosate but is also prepared for a possible exit from the market, the group’s CEO said on Thursday.
Facing weak earnings, rising legal costs and a lagging share price, Bayer hopes the strategy will provide it with a way to stem damages out of court, having already paid about $10 billion to settle disputed claims that Roundup, its weedkiller based on glyphosate, causes cancer.
“We’re making this case to lawmakers, and we appreciate the bi-partisan support we see,” Chief Executive Bill Anderson said in a transcript of his speech for the company’s annual shareholders’ meeting on April 25.
Georgia and North Dakota have already passed legislation, Anderson said, adding: “we hope other states follow their lead.”
Bills recently passed in both states on pesticide labelling have yet to be passed into law by the governors.
However, Anderson warned that the legal problems could force the end of marketing for glyphosate.
“In fact, we’re nearing a point where the litigation industry could force us to even stop selling this vital product,” he said. “That’s not something we want to do, but we need to be prepared for all outcomes.”
Bayer earlier this month again petitioned the U.S. Supreme Court to sharply limit legal claims that Roundup causes cancer, seeking to avoid potentially billions of dollars in damages.
Anderson has struggled to revive a share price that has plunged by more than 70% since Bayer’s $63 billion acquisition of Monsanto in 2018 that saddled it with litigation and debt.
About 67,000 further cases are pending for which the group has set aside $5.9 billion in legal provisions.
Reuters reported in March that Bayer told U.S. lawmakers it could stop selling Roundup unless they can strengthen legal protection against product liability litigation, according to a financial analyst and a person close to the matter.
Anderson said 2025 would be “the most difficult year of our turnaround” as the company targets a return to earnings growth from 2026 after a decline this year.
According to his prepared remarks, he will appeal to shareholders later this month to back a capital increase of up to 35% to provide “important flexibility in containing litigation while maintaining a credit rating at an appropriate level”.
The potential capital increase, worth around 8 billion euros ($9.09 billion) based on the company’s current market value, was proposed last month.
Bayer has said it would only resort to a rights issue if absolutely necessary, but that it could not rule out having to increase capital at short notice for settlements with U.S. plaintiffs.
($1 = 0.8797 euros)
(Reporting by Rachel More, editing by Kirsti Knolle and David Evans)
Brought to you by www.srnnews.com
