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.
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Top News
Chinese Manufacturing
China's March manufacturing numbers have boosted markets today—Shanghai Composite up 2.6%, Hang Seng up 1.7%, ASX 200 up 0.6%. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) hit 50.8 for the month, despite analysts' expectations of 49.9, which would have marked another month of slight contraction. The official Chinese PMI for March was 50.5. Bloomberg
European Manufacturing
European PMI figures from IHS Markit were not so great, with the Eurozone's PMI down month-on-month from 49.3 to 47.5, which is the lowest figure since April 2013. Things were worse in Germany, with an 80-month low of 44.1. IHS Markit points its analytical finger at "lower demand linked to Brexit, trade uncertainty, troubles in the automotive industry and generally softer global demand." Reuters
Saudis vs. Bezos
Jeff Bezos's security chief, Gavin de Becker, has reported back on the leak to the National Enquirer of the Amazon chief's sexts with his mistress. De Becker reckons the Saudi authorities hacked Bezos's phone as revenge for the Bezos-owned Washington Post giving heavy coverage to the Saudis' murder of Jamal Khashoggi, who wrote for the paper. He said it remains unclear whether Enquirer publisher AMI knew about the Saudis' involvement; the paid source was the mistress's brother. Fortune
Turkish Polls
Turkey's stock market slid Monday morning (before recovering) and the lira took a dip after President Recep Tayyip Erdogan's Justice and Development Party lost the capital, Ankara, in municipal elections. It's still too tight to call, but the party may also have lost Istanbul. The losses may cause Erdogan to step up his populist policies. CNBC
Around the Water Cooler
Chinese Fentanyl
China is fulfilling a pledge made by President Xi to President Trump, by adding fentanyl to a list of controlled drugs. The U.S. has accused China of not doing enough to curb exports of the painkiller, which has played a role in the American opioid crisis. Chinese manufacturers have been skirting previous bans by slightly altering the chemical structure of the substance. South China Morning Post
J&J Shampoo
Johnson & Johnson's baby shampoo has failed quality tests in an Indian state, prompting the company to say it does not accept the results. Regulators in Rajasthan said two batches were found to contain unspecified "harmful ingredients." J&J indicated the cited substance was formaldehyde, a known carcinogen, but denied that there was any formaldehyde in the baby shampoo. Reuters
Brexit Votes
The U.K. Parliament will today vote again on a series of options for solving the interminable Brexit mess. The previous attempt at "indicative votes," which took place last week before Prime Minister Theresa May's millionth (third) defeat on her negotiated Brexit deal, saw no option achieve a majority among lawmakers. However, the options of a second referendum and the U.K. entering into a new customs unions with the EU scored the most votes, so let's see how those ideas do today. Guardian
Irish Border
If you want to know why it is that the Irish border plays such a pivotal role in the Brexit saga, Patrick Radden Keefe has written a good piece for the New York Times about Northern Ireland, its border with the Republic of Ireland to the south and west, and the fears many have about the re-imposition of a hard border igniting fresh violence. NYT
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
