Bayer reaches $10.5 billion settlement over weedkiller Roundup

Deal will settle tens of thousands of lawsuits alleging the Roundup herbicide causes cancer

Bayer AG is set to announce on Wednesday it struck a roughly $10.5 billion deal to settle tens of thousands of lawsuits with U.S. plaintiffs alleging the company's Roundup herbicide causes cancer, a milestone in the German company's legal battle that has been weighing down its share price for nearly two years, according to a person familiar with the deal.

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Investors have long been waiting for a settlement to bring clarity over how much the legal battle will cost Bayer. Wednesday's deal follows months of heated talks between Bayer and plaintiffs' attorneys.

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Bayer, which also makes pharmaceuticals, inherited thousands of lawsuits against Roundup inventor Monsanto Co. when it acquired the U.S. agriculture giant in 2018. Three jury-trial losses tanked shares and sparked a revolt among shareholders angry at Bayer's management for plunging the company into one of the worst crises in its history with the $63 billion Monsanto acquisition.

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Bayer has argued that Roundup is safe and has repeatedly defended the Monsanto deal.

Containers of Roundup are displayed on a store shelf in San Francisco on Feb. 24, 2019. (Associated Press)

As part of the deal with plaintiffs' attorneys, Bayer will pay some $9.5 billion to settle claims brought by lawyers representing some 95,000 plaintiffs, the person familiar with the matter said. It will set aside an additional roughly $1.1 billion to establish and fund a panel to evaluate whether the product causes cancer to help shape the outcome of future cases.

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Investors have said a settlement in the range of $10 billion would be viewed as a good deal for the company. The Wall Street Journal previously reported that a deal in that range was being discussed.

Write to Laura Kusisto at laura.kusisto@wsj.com and Ruth Bender at Ruth.Bender@wsj.com

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