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Bayer boss Werner Baumann: Failed again
Photo: Geert Vanden Wijngaert
Bayer boss
Werner Baumann
(58) failed again. He just can't get the legal material battle into which he bought his way in the $ 60 billion takeover of the US agricultural company Monsanto under control. The most recent blow came from the presiding judge of the United States District Court for the Northern District of California. On six slim pages, federal judge
Vince Chhabria
(51)
tore up
the comparison with which Baumann wanted to eliminate future claims for damages once and for all.
The quick agreement in the dispute over the weed killer Round up, on which Baumann had recently speculated, is thus off the table, the war of nerves continues.
Instead of a uniform solution, the Bayer boss and his lawyers are now facing a marathon of negotiations with dozens of law firms demanding compensation for their clients who may be suffering from cancer in the coming years.
The Germans have to agree with the regulatory authorities about a warning label.
Glyphosate-containing herbicides will disappear from the shelves of home improvement and home improvement stores in the United States.
So far rejected in US courts - next stop is the Supreme Court
Whether the Monsanto adventure will ever pay off for Bayer is now in the hands of the Supreme Court in Washington, which will take up and decide on one of the three pending appeal proceedings at the earliest in summer 2022. So far, however, Baumann has shown little luck in the courtrooms. Three times he got the short straw in damages lawsuits in the first instance, and twice in the subsequent appeal proceedings. And each time the judges were not interested in the fact that Bayer strictly adhered to the requirements of the regulatory and approval authorities when selling the glyphosate-containing agent.
Baumann entered the settlement negotiations a good two years ago in order to achieve an economically sensible compensation with the greatest possible legal certainty for the glyphosate-dependent business model of Bayer's agricultural division.
That was his real goal - and after Chhabria's rejection it is now even more difficult to achieve than it was already.
Financially manageable
The setback is financially manageable.
The company has already set aside two billion dollars to pacify future cases.
A good ten billion are reserved for the 120,000 or so lawsuits that have been filed in recent years.
A good 96,000 of these cases have been processed.
In terms of balance, most of the glyphosate war has already been overcome.
Judge Chhabria smugly writes in his reasoning that the plaintiffs do not have to fear bankruptcy of the company.
After all, Bayer's case would be a stable and prosperous company that would continue to make decent profits from the sale of Round up.
Hedge funds aim to break up the group
Baumann hits the now ongoing uncertainty much harder.
As long as the dispute continues, the share price will not recover either.
Bayer remains a target for aggressive hedge funds that attack the company and push for a breakdown into an agricultural and a pharmaceutical part.
Above all, Baumann loses time that he doesn't have.
The pharmaceutical division, which made the purchase of Monsanto possible in the first place with its blockbusters, has been suffering from a lack of capital and a lack of attention from top management for some time.
Egg dance around the warning sign - patience of the shareholders in the end
In addition, Baumann will find it difficult to convey to his shareholders why he now wants to fall back on solutions that he could have had for a long time, but which he has so far strictly rejected. No longer selling glyphosate to private house and property owners is just as much a part of it as a warning label on the packaging, with which the tobacco industry has protected itself against claims for damages since the turn of the millennium.
Judge Chhabria had already urged this option in his first hearing last week.
The argument of the Bayer attorneys that the California authorities were banned from such a warning in 2019 by a US federal court, Chhabria is now sweeping aside in a snippy footnote.
The group has not even tried to come to an agreement with the authorities on a modified warning.
The patience of the shareholders with Baumann is likely to be coming to an end anyway.
In 2019 they already withdrew their trust in him at the Annual General Meeting.
And if you listen to hedge funds and mutual fund managers, it is clear that the rebellion of that time is by no means over.
It has only been tied in with a truce that can be lifted at any time.