Bayer’s chairman quits as the company attempts to settle Monsanto lawsuits

As Bayer continues to try to clean up the mess of lawsuits stemming from the destruction that Roundup has wreaked on human health and the environment, its chairman and a key figure in the firm’s takeover of Roundup manufacturer Monsanto, Werner Wenning, will be leaving his post. According to a company announcement, Wenning will step down next month.

Shares of Bayer have dropped by roughly 25 percent since August 2018. That was the month that they lost their first lawsuit claiming that Roundup causes cancer. Bayer acquired Monsanto in a $63 billion takeover deal, and they’ve been fighting expensive lawsuits related to Roundup and other Monsanto products ever since.

In a statement, the 73-year-old chairman said that he felt they were making progress in dealing with the firm’s legal woes and that it was therefore a good time for him to step down. He added that he had planned to step down last year when he turned 72, which is the board’s recommended age limit, but he had been asked to stay on as the firm weathered a legal storm.

His successor has been named as Norbert Winkeljohann, a former head of the PricewaterhouseCoopers European audit firm who has been on the supervisory board of Bayer since 2018. He will step into the role after Bayer’s annual shareholders meeting takes place on April 28.

Lawsuits continue to pile up

Winkeljohann has his work cut out for him as the firm faces nearly 43,000 plaintiffs in the U.S. alone in lawsuits related to Roundup that could cost the company as much as $12 billion to settle.

A state court jury awarded a groundskeeper suffering from cancer that he says is related to glyphosate exposure with nearly $300 million in damages in the first Roundup lawsuit in August 2018, although a judge later reduced the award to $78 million. Two cases that followed saw similar verdicts and expensive payouts, and the company is appealing in all three of the cases.

Shareholders have been unhappy with the way Bayer is handling the issue and many feel they underestimated the risks of buying Monsanto. Last year’s annual general meeting saw unprecedented disapproval aimed at top management. Bayer Chief Executive Officer Werner Baumann became the first CEO of a big German firm in decades to lose a confidence vote by shareholders last April as the first Roundup trial losses started rolling in. He faces another shareholder vote next month.

Roundup isn’t the only problem Bayer will have to pay for

In addition to a growing number of glyphosate-related lawsuits, Bayer is also facing suits related to Monsanto’s dicamba products. The herbicide is prone to drifting onto nearby crops, many of which haven’t been engineered to resist it, thereby destroying the crops and in some cases, farmers’ livelihoods as well.

There are already more than 140 lawsuits in the works related to the issue, with one recent case seeing a Missouri peach farmer awarded $265 million by jurors in a federal court. The verdict prompted a sharp 3.3 percent drop in trading, the biggest one the firm had seen in more than four months.

Bayer will also have to contend with thousands of lawsuits that claim the company hid the safety risks of its birth control device Essure. The first case related to that device will go to trial this month. They’re also facing lawsuits from various cities who allege Monsanto contaminated their waterways with toxic chemical compounds known as PCBs.

The firm recently announced it would strengthen the external oversight of the due diligence carried out when making deals in an attempt to appease shareholders. They said an independent expert would be reviewing Bayer’s rules governing how they scrutinize major deals, with the results scheduled to be published later this month.

Sources for this article include:

Reuters.com

Fortune.com