Bayer Has a $289 Million Roundup Headache

Last fall, as Bayer AG was completing its $66 billion mergerwith Monsanto Co., Chief Executive Officer Werner Baumann visited the concrete-slab Berlin complex where company scientists develop disease-fighting drugs. At an employee town hall meeting, Baumann asked whether staffers believed environmentalists’ claims that the Monsanto weed killer Roundup causes cancer. Despite the CEO’s obvious interest in the acquisition, some raised their hands. On Aug. 10 a California court agreed, awarding a school groundskeeper dying of lymphoma $289 million on a claim that exposure to glyphosate, Roundup’s key ingredient, had contributed to his cancer. The verdict—the first in what may be thousands of cases—sent shock waves through Bayer and erased $16 billion from the company’s market value in a week. “The odds are that Bayer will suffer more losses” in litigation over Roundup, says Elizabeth Burch, a University of Georgia liability law professor. “Investors better get prepared.”