Funding Roundup Lawsuit Settlements May Require Bayer To Issue New Stock

The company has repeatedly failed to convince courts to dismiss non-Hodgkin’s lymphoma lawsuits over Roundup, leading to billions in settlement payouts in recent years.

Bayer indicates that it intends to issue new stock to fund Roundup settlements and legal costs, and may entirely end the sale of the controversial glyphosate-based weedkiller in the U.S., to stem the continuing stream of non-Hodgkin’s lymphoma lawsuits being brought by former users.

Roundup has been widely used for decades in the agricultural industry and for residential purposes, containing the active ingredient glyphosate. Although it has been marketed as safe for humans, research over the last several years has linked Roundup exposure to an increased risk of non-Hodgkin’s lymphoma and other adverse health effects.

As a result of the failure to warn about these risks, Bayer and its Monsanto subsidiary have faced more than 120,000 Roundup lawsuits in recent years, each raising similar allegations that users developed non-Hodgkin’s lymphoma from the weedkiller, either when using the product in an agricultural setting or around the home.

The litigation began to emerge in 2015, when the World Health Organization’s International Agency for Research on Cancer (IARC) decided to classify glyphosate in Roundup as a probable cancer-causing agent.

After spending more than $10 billion in Roundup settlements, Bayer announced in 2021 that it would reformulate Roundup and remove the active ingredient glyphosate from consumer versions of the weedkiller. However, the company still faces thousands of individual lawsuits it failed to settle, and new claims continue to be brought as former users are diagnosed with non-Hodgkin’s lymphoma.

Late last week, Bayer announced that it will seek shareholder approval to issue new shares, worth nearly 35% of its outstanding shares, in order to raise money over the next three years to cover the ongoing costs of Roundup lawsuit payouts and settlements. The company’s stock value dropped by about 10% after the announcement was made, according to various market experts.

The announcement comes on the heels of a report published by Reuters on March 7, which indicated that Bayer officials have also told U.S. lawmakers that the company is thinking of removing Roundup from the U.S. market entirely if the company cannot get legal protection from litigation.

Bayer has made several legal attempts to convince courts to dismiss Roundup lawsuits, arguing that the company should be exempt from liability under federal preemption laws. However, judges have repeatedly shot down the company’s legal theory, and lawsuits continue to move forward through the U.S. court system. 

The preemption argument was most recently rejected by the Missouri Court of Appeals for the Eastern District, after the company tried to reverse a $1.25 million verdict returned by a jury in October 2023.

Now, according to the Reuters article, the company is considering abandoning the U.S. market altogether and is warning lawmakers and farmers that it will go that route without legal protections.

The announcements came shortly after the company released its fourth quarter financial report for 2024 last Wednesday. The company also issued glyphosate sales numbers for the first time, indicating Roundup brought in $2.8 billion in revenue in the U.S. last year.