Bayer Faces Billions in Payouts for Many years-Outdated Poisonous Mess

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Bayer Faces Billions in Payouts for Many years-Outdated Poisonous Mess

Bayer AG’s Monsanto unit stopped making poisonous PCBs a half century in the past, however the authorized fallout lingers at the same time as lots of the constructing supplies made with the chemical compounds are not utilized in US properties, colleges and factories.

On Tuesday Bayer was hit with a $100 million verdict in the latest case blaming it for college students and college at a Seattle-area public faculty being sickened by publicity to polychlorinated biphenyls, or PCBs, contained in ageing fluorescent-light fixtures.

The corporate faces billions of {dollars} in publicity from a rising variety of lawsuits over PCB merchandise filed by state and native governments, faculty districts and people.

Bayer, which acquired Monsanto in 2018 for $63 billion, already has agreed to pay nearly $2 billion in settlements in PCB instances introduced by states, cities and counties. Separate litigation over Monsanto’s Roundup weedkiller has created a drag on the German conglomerate’s shares, which have misplaced about 80% of their worth because the acquisition. The corporate has reserved $16 billion for US lawsuits over Roundup and faces a wave of trials.

Burgeoning Drawback

Analysts are casting a cautious eye on Bayer’s burgeoning PCB drawback. Bloomberg Intelligence analyst Holly Froum projected in November that it might price Monsanto and two different firms embroiled within the litigation, Eastman Chemical’s Solutia and Pfizer’s Pharmacia, as a lot as $3.9 billion to settle the remaining instances, up from her earlier estimate of $2.5 billion.

“That is an unlucky setback for Bayer,” stated Sebastian Bray, an analyst at Berenberg. He and others pointed to a different case underneath assessment by Washington state’s supreme court docket as extra of a bellwether. The inventory was little modified in Frankfurt buying and selling on Wednesday.

US regulators banned PCB manufacturing in 1979 after analysis linked the chemical compound to most cancers, liver injury and different illnesses.

“PCBs aren’t an issue of the previous” for Bayer and Monsanto, stated Ellen Griffith Spears, a College of Alabama professor who has studied the impact of the air pollution on cities and cities. “They’re very a lot an issue of the current.”

Bayer acknowledges that its PCB caseload has grown lately, however says it’s assured the litigation gained’t mushroom into the type of existential menace Roundup has posed.

“The manufacture of PCB-based merchandise was concentrated in sure areas of the nation, so we anticipate any potential future litigation to be restricted as PCBs is just not a 50-state challenge,” the corporate stated in an announcement.

This week’s verdict in Washington state court docket marked the tenth time that college students and college at Sky Valley Academic Middle have taken Bayer to trial over claims they suffered mind injury and different accidents. The case featured 15 alleged victims, the biggest group but.

Monsanto stated it was happy that the jury awarded damages to solely 4 of the plaintiffs but in addition stated it can problem the decision, which included $75 million in punitive damages. A lawyer for the plaintiff stated he wasn’t disillusioned with the end result, including that “each case is totally different.”

In earlier Sky Valley instances, about 20 of the 65 plaintiffs had been awarded no damages, however Bayer was hit with a complete of greater than $1 billion in damages in these trials.

PCBs — utilized in electrical transformers, paints and sealants in addition to constructing supplies — had been as soon as prized for his or her fire-resistant properties. The lawsuits in opposition to Monsanto allege that it knew PCBs had been poisonous to people and wildlife and will trigger contamination far into the longer term, however hid the danger and continued to make the product.

Bayer’s Technique

Bayer is pursuing a technique to recoup a few of its litigation prices from different firms reminiscent of Common Electrical and Westinghouse Electrical, now Paramount World, that had been giant customers of Monsanto PCB merchandise. Bayer has employed a outstanding private damage lawyer, Mark Lanier, to attempt to enforce 52-year-old contracts that the corporate says require its company clients to indemnify Monsanto for payouts tied to PCB air pollution.

Among the many settlements Bayer has reached, it agreed in 2020 to pay about $650 million to resolve waterway air pollution claims by about 2,500 municipalities. Cities and cities argued Bayer’s PCBs poisoned their streams and rivers. It has additionally struck separate accords with Oregon for $698 million and with six different states and Washington, DC for a complete of $456 million.

The corporate nonetheless faces dozens of PCB lawsuits by faculty districts, states and cities over well being publicity and environmental contamination in buildings, landfills and waterways, in keeping with Bayer’s 2023 annual report.

Bayer stated within the report it may face “appreciable monetary disadvantages” if it loses these instances, which can pressure the corporate to tackle extra debt or divest property to cowl the prices.

Picture: Photographer: Krisztian Bocsi/Bloomberg

Copyright 2025 Bloomberg.

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