The Bayer Group is considering a possible withdrawal from the U.S. market in connection with the ongoing wave of lawsuits over the herbicide glyphosate. CEO Bill Anderson stated in a speech released in advance of the upcoming shareholders' meeting that the company might stop marketing the product in the United States if legal pressure continues to mount. While Bayer would prefer to avoid this step, the company is preparing for all conceivable scenarios. At the shareholders' meeting on April 25, investors are expected to vote on a contingency resolution that would grant the executive board, among other things, leeway for a capital increase.
Through a capital increase, Bayer aims to expand its financial flexibility to settle legal disputes and at the same time maintain the company’s credit rating. Approval from shareholders would allow the company to reach settlements in numerous U.S. lawsuits without increasing its debt. Bayer had already announced the capital increase plans in early March. The company received support from the influential proxy advisory firm ISS, which described Bayer’s justification for the move as convincing.
Amid the legal disputes, Bayer recently scored a partial success in the U.S. After the state of Georgia, North Dakota also passed a legislative amendment that could strengthen the company’s position. Under the new law, the classification by the U.S. Environmental Protection Agency (EPA) would become binding. The EPA does not consider glyphosate to be carcinogenic and therefore prohibits cancer warnings on glyphosate products. Anderson expressed hope that more states would follow suit. So far, Bayer has set aside €5.7 billion in provisions for the glyphosate lawsuits.
The company brought the wave of litigation upon itself when it acquired U.S. manufacturer Monsanto in 2018. Sales of glyphosate products under the brand name “Roundup” to private customers in the U.S. have already been halted, as they represent the majority of plaintiffs. However, the more significant business with agricultural customers remains at risk. At the same time, Anderson is pushing ahead with the internal restructuring of the company. As part of a new organizational model, around 10,000 jobs have been cut and the number of management positions halved. The restructuring has already led to savings of €500 million, with the goal of saving €2 billion annually by the end of 2026.
