WASHINGTON (dpa-AFX) - Bayer can now pin stronger hopes on a favorable landmark ruling from the highest US court in its multi-billion dollar glyphosate legal battles. On Friday, the US Supreme Court agreed to hear the "Durnell" case. The justices will decide whether federal law regarding warning labels on the sale of weedkillers—as Bayer argues—supersedes state law. The Leverkusen-based company welcomed the decision. At the start of the week, Bayer shares jumped 6.6 percent at the top of the DAX, outperforming a weak overall market.
The stock thereby continued its ongoing recovery. Since its low in April last year, the price has more than doubled, now standing at just over 44 euros. Analyst Chris Counihan from US investment bank Jefferies called the decision another positive step. It also gives the company a better negotiating position should it ultimately pursue a settlement. Expert Richard Vosser from JPMorgan calculated, for example, that a 5 billion euro reduction in provisions would correspond to an estimated 10 percent increase in the share price. At the end of the third quarter, Bayer still had provisions of 6.5 billion euros on its balance sheet.
"The Supreme Court's decision is good news for farmers in the US, who need regulatory clarity," said Bayer CEO Bill Anderson. "It is also an important step in our multi-pronged strategy to significantly reduce litigation. In the US, it must now be clarified in law that companies cannot be convicted based on the law of individual states if they comply with federal US labeling requirements."
The case of plaintiff John Durnell was originally heard in St. Louis in October 2023. The jury found that the company should have issued a cancer warning and awarded the plaintiff significant damages. Bayer later selected this case to take before the US Supreme Court in order to obtain a landmark ruling.
Bayer argues that the US Environmental Protection Agency (EPA) does not see health risks in the product when used according to regulations. The EPA had approved the product label without a warning. Therefore, according to Bayer, claims for damages "based on state law should not stand up in court."
In early December, the so-called Solicitor General—a kind of chief attorney for the US government—supported the company's request for the "Durnell" case to be reviewed by the US Supreme Court. The share price had already surged at that time. Now that the case has been accepted, the justices are expected to decide by the end of June, as the current US Supreme Court session concludes around that time.
In the fall, when presenting third quarter figures, Bayer increased its glyphosate-related provisions. CEO Anderson attributed this to settlement agreements and a moderate rise in glyphosate lawsuits filed. As of October 15, Bayer reported 197,000 registered claims, of which about 132,000 had been settled or did not meet settlement criteria.
Overall, Anderson, who took the helm in Leverkusen in June 2023, has committed not only to a business turnaround but also to significantly reducing US litigation by the end of 2026. Bayer took on these legal battles in 2018 with the acquisition of US agrochemical company Monsanto, a deal pushed through by Anderson's predecessor Werner Baumann. After an initial loss in a glyphosate trial, the number of plaintiffs soared and the share price entered a years-long downward spiral.
Alongside hopes for a positive Supreme Court ruling, settlements also play a role when the company deems them more advantageous than ongoing legal risks and potential trials with plaintiffs who blame glyphosate for their cancer. Bayer has also intensified lobbying efforts in US states to bring about legislative changes. As in the "Durnell" case, the central question is whether federal law takes precedence over state law./mis/men/lew/tih
