There is one more tribunal in which Bayer AG’s efforts to defend its Roundup weedkiller are floundering. This is the court of public opinion.
Bayer says that science shows that the herbicide, from which the German company gained in its $63 billion acquisition of Monsanto Co., is very safe. Now that a 2nd U.S. jury has linked the product to cancer, there is an uphill battle for Chief Executive Officer Werner Baumann to fight, and it just got steeper. The company has lost more than as much as $30 billion in market value since the first defeat in August last year, raising fresh questions about a deal he spearheaded.
Roundup became the company’s biggest headache after the June 7 completion of the Monsanto deal. Baumann entered the deal to remain a global competitor in seeds & agricultural products. Bayer now faces around 11,000 suits from cancer patients and their families and now its second loss paints a dire picture. The shares fell by 13 percent on Wednesday, the most since August last year, and were fetching 62.53 euros at 4:47 p.m. in Frankfurt.
Baumann began crafting the deal just a few days into his tenure in 2016, with a lot of backing from Chairman Werner Wenning, who had hand-picked the CEO and worked very closely with him during the acquisition talks. Baumann was very much aware of the seed maker’s image problem, but he believed that changing Monsanto’s name would help sway public opinion. Bayer’s huge reliance on scientific experts’ opinions that the main ingredient in Roundup, called glyphosate, was safe might have blinded it to the burden the giant transaction it would bring.