Bayer Made Billions Off Roundup — But the Weedkiller Might Eliminate Operations Amid Lawsuits

The world’s most popular weedkiller might get the job done, but 50 years after hitting the market, scientists are still unsure whether it’s safe. Every year, American farmers paint their fields with some 300M pounds of glyphosate — but its days may well be numbered.

That’s because, while the US Environmental Protection Agency (EPA) says it’s “not likely” to be carcinogenic, the World Health Organization’s IARC holds that it’s “probably carcinogenic to humans.” And where there’s gray area, there are ample opportunities for interpretation.

Gray area: In 2018, the same year as longtime Roundup owner Monsanto sold to German pharmaceutical company BayerBAYRY

in a $63B deal, a California judge ordered the company to pay $289M to a school groundskeeper who alleged the weedkiller caused his cancer. The court’s nod, which came just a year after California’s Office of Environmental Health Hazard Assessment placed the chemical on its Prop 65 list following the IARC’s recommendation — cleared the way for thousands of litigants to pursue similar claims.

• While Bayer holds that Roundup is safe and cites the EPA’s determination, it has paid over $10B in payouts to plaintiffs over the last decade — and has set aside more than $5.9B more to settle 67K+ pending cases.
• The cost of litigation has largely offset the product’s revenue — Roundup made $2.8B for Bayer last year, barely breaking even, per CEO Bill Anderson.

Bye-Bye, Bayer

Bayer’s acquisition of Monsanto is now considered one of the worst buyouts in history, in part because the weight of Roundup has sunk not just the crop sciences division of the German business but its total value. Bayer’s market cap has fallen to €19.8B ($22.4B) — a pittance of what it paid. And saddled with uncertainty, it might have to cut its losses.

• Bayer warned in March that it might stop selling Roundup entirely, citing a lack of “regulatory clarity” that has allowed litigants to cite state rules despite EPA approval.
• The move would upend the US agriculture market, which is not just heavily reliant on the weedkiller but also on glyphosate-resistant seeds sold by the company.

Forward-looking: Bayer says that it hopes to “significantly contain” litigation by 2026, per Reuters. And barring federal protections, Bayer could be angling to settle its outgoing suits for significantly less on appeal — then exit the US market entirely. In its absence, it’s hard to tell what could replace the legacy herbicide — as WSJ notes that it’s unlikely any American firm would pick up production or any competitor would seek to make a replacement product. With few other options, the end of the Roundup era could stand to further complicate an already-complicated US agriculture business.