According to Reuters, opponents yesterday sought to transfer Bayer's proposed $7.25bn Roundup settlement from a Missouri state court to a federal court. These objectors contend that the agreement is the product of "collusion" between the group and class-action lawyers, the latter of whom are seeking $675m  in fees. Meanwhile, the German company and lead counsel maintain that the settlement is fair and that these opponents are attempting to disrupt its approval. This development could complicate the path toward final certification.

In parallel, dtnpf.com, a US media and data provider specializing in agriculture, reports that Latham Quality, an Iowa-based seed company, is taking legal action against Bayer. The company alleges in a new lawsuit that the German firm illegally maintained control over the NK603 genetically modified trait, which provides glyphosate resistance to corn, even after the patent covering this technology expired in November 2022.

In the complaint filed in the US District Court for the Eastern District of Missouri, Latham states that its sales grew annually between 2009 and 2021. It was from this period onward that, according to the company, Bayer's conduct began to cause harm. Due to its financial losses, Latham Quality specifies that it was forced to sell its retail seed brand to MS Technologies LLC in August 2024.

Specifically, Latham Quality states that "in a competitive market, the access price for NK603 as well as the selling price of hybrid corn seeds containing NK603 should have decreased after the expiration of Bayer's last US patent in November 2022. Even four years later, no credible competitor to Bayer has emerged. This is the direct result of Bayer's anti-competitive practices aimed at maintaining its monopoly."

mwb Research's View

The independent German financial research firm believes, unsurprisingly, that these developments are clearly unfavorable and could sustain share price volatility in the short term. Analysts suggest that this "background noise" comes amid improving operational performance. Notably, the Crop Science division is showing better execution despite a challenging sector environment, and product launches in the Pharma division continue to gain traction to offset the erosion of legacy products.

For mwb Research, Bayer's current valuation already incorporates a significant litigation discount, while giving limited credit to the improving quality of earnings and the prospect of an eventual reduction in legal risk. Analysts add that the path to a sustainable rerating will likely not be linear. They believe that with operational momentum intact and legal milestones still ahead, the risk/reward profile remains attractive. It therefore confirms its buy rating on the stock, along with its target price of €52.