A mediator for Bayer AG has declined reports that the company has agreed to pay $8 billion in settlement payments in a class-action lawsuit for Roundup herbicide. Following the denial, the shares of the company jumped by 11%.
Mediator reveals the truth
According to Ken Feinberg, who is Bayer’s mediator in the case, there is no talk of a settlement payment in the company. In an email on Friday, he said,
“Bayer has not proposed paying $8 billion to settle all the U.S. Roundup cancer claims. Such a statement is pure fiction. Compensation has not even been discussed in the global mediation discussions.”
Bayer is facing a lawsuit led by a couple who suggest that the company’s herbicide is responsible for their cancer. Rounder and other glyphosate-based weedkillers were added to Bayer’s portfolio when the company bought Monsanto last year for $63 billion. Bloomberg earlier reported that the company would be paying about $8 billion in settlements related to the suite. However, the company didn’t comment on the report as well as Feinberg’s comments.
Bayer CEO Werner Baumann said last week that they would consider the settlement but only if it comes on reasonable terms and it finalizes the “overall litigation.” He even said that the company is constructively engaged in a court-order process with Feinberg. However, he is the mediator only for the federal court cases while the majority of these cases are filed with US state courts.
Bayer suffers while courts proceeds
The shares of Bayer have shaved off over 30% of their valuation, wiping off 30 billion euros from the company’s market capitalization since last August. At the time, a California jury suggested in one of the lawsuits that Monsanto, which is now a part of Bayer, should have warned users of the alleged cancer risks that Roundup could pose.
The German company is trying to start negotiations with the lawyers of the plaintiff, as noted by Reuters. One of the sources said that the real problem lies in getting plaintiffs to come down from their high expectations of damages. The source also noted that Bayer hadn’t found a single favorable jury verdict yet and the company is also concerned about future claims. Another problem for Bayer may arise if it tries to get the cases heard in Missouri where Monsanto was headed. However, the state jury here is well known for slapping huge settlement claims on companies.
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