By David Meyer
April 1, 2019

Good morning. David Meyer here, filling in for Alan from Berlin.

Last week, Bayer got hit with another big damages verdict relating to the Roundup weedkiller it got as part of its Monsanto takeover. This time it was $81 million, slightly more than the figure for the last award after Bayer’s appeal.

There are still another 11,300 cases to go. So, as I asked in a Saturday article on the subject, was the Monsanto buy a bad idea?

The story dives into the arguments for the deal and the controversy surrounding the safety of glyphosate, the active ingredient in Roundup. I also spoke to Christian Strenger, the activist investor who hopes to bring down Bayer’s board with a no-confidence motion at the German giant’s annual general meeting later this month. According to Strenger, there’s a big outstanding question about whether Monsanto should have put stronger warning labels on its products, and Bayer’s board should have taken more seriously the mounting pile of lawsuits as the merger’s closing neared.

There are really no simple answers to these conundrums. Bayer maintains that it went through proper due diligence processes. It also remains adamant that glyphosate is safe to use—juries think otherwise, but is that a function of their emotional response to the plaintiffs’ cancers?

Ultimately, it would be very hard to prove that Bayer’s board messed up from a legal perspective, given that no regulators have found glyphosate to be unsafe. However, this is a debate about business decisions, and the verdict there will be financial in nature. If those huge awards continue to pile up, it will be very difficult to look back on the takeover as a wise move.

More news below.

David Meyer
@superglaze
david@dmeyer.eu

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