After more than a year of negotiations, Bayer (BAYRY) - Get Bayer AG Report agreed to settle the U.S. lawsuits that claimed the German agrochemical company's weedkiller Roundup caused cancer for as much as $10.9 billion.
American depositary receipts of Bayer rose 1.47% to $20.69.
"First and foremost, the Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end,” CEO Werner Baumann said in a statement. “It resolves most current claims and puts in place a clear mechanism to manage risks of potential future litigation."
Bayer will make a total payment of $10.1 billion to $10.9 billion to resolve current litigation and address potential future Roundup litigation.
The company will make a payment of $8.8 billion to $9.6 billion to resolve the current Roundup litigation, including an allowance expected to cover unresolved claims, and $1.25 billion to support a separate class agreement to address potential future litigation.
Bayer said it has come to terms with about 75% of the current Roundup plaintiffs, involving about 125,000 filed and unfiled claims overall. The settled cases account for about 95% of those currently set for trial.
The company will also resolve dicamba drift litigation for payment of up to $400 million and most PCB water litigation exposure for payment of about $820 million.
Reports of a possible settlement first surfaced in January. Bayer acquired Roundup when it bought the herbicide’s producer, Monsanto, in June 2018.
Bayer said glyphosate, the active ingredient in Roundup, does not cause cancer. The U.S. Environmental Protection Agency has said that the product does not require a cancer warning.
Three cases that have gone to trial will continue through the appeals process and are not covered by the settlement, the company said.
“The Roundup agreements are designed as a constructive and reasonable resolution to a unique litigation,” Kenneth Feinberg, court-appointed mediator for the settlement talks, said. “The separate, independent settlements of the current claims are unique and a tribute to Bayer."