We’ve all made bad purchases. That timeshare in the Keys. The Peloton collecting dust in the garage. But imagine buying something that, 6 years later, hasn’t just gone down in value, but has cut your overall net worth by 70%. In fact, the purchase is so bad that your net worth is now less than half of what you paid for that one single thing in the first place. If you count yourself in this latter group, you join the German biotech and pharmaceutical giant Bayer, who forked over $63 billion in cash for the agrochemical company Monsanto back in 2018. Once valued well over $100 billion, Bayer’s market cap now hovers around $30 billion, and it could easily pay out billions more to settle legal troubles stemming from Monsanto’s best seller, the pesticide Roundup. 

Roundup has been a huge seller for Monsanto since they developed the product in the mid-1990s. Back in 2016, when Bayer agreed to buy Monsanto, Roundup brought in billions per year in profits. But it’s more than just a consumer grade product. You may not realize it, but a good portion of our food supply relies on Roundup. Most of Monsanto’s revenue doesn’t come from selling herbicides per se. Rather, most of their revenue comes from selling seeds, many of which have been specially engineered to withstand Roundup. In the US, about half of all soy and corn production comes from “Roundup-Ready” seeds. As much as the Malthusians may have missed the mark when it comes to the global population running out of food, it’s still an open question whether we can feed ourselves without Monsanto.

Glyphosate, but is it Glypho-safe? 

The chemical in question is known as glyphosate. In studies, exposure to the chemical has been linked to an increased risk of non-Hodgkin’s Lymphoma. In 2015, before Bayer decided to purchase Monsanto, the WHO’s International Agency for Research on Cancer (IARC) classified glyphosate as “probably” carcinogenic to humans. Some jurisdictions have even moved to limit its use or outright ban the pesticide altogether: Tucson, AZ; Portland, OR; and Reno, NV just to name a few. But this link to cancer is no smoking gun, at least not to US regulators. Both the EPA and FDA deem it unlikely to cause cancer. Don’t swim in a vat of it, but exposure levels from spraying it or from residues left on plants have been deemed safe for humans. Harmed parties have evidence to support their case, and so too does Monsanto. So, it seems like it will have to be settled by the courts, which have also shown mixed, but expensive, results thus far. 

Bayer, the Litigation Payer

After the WHO suggested that glyphosate “probably” causes cancer, cases against Monsanto started to pile up. In 2020, Bayer paid over $10 billion to settle 95,000 thousand cases brought against their subsidiary, alleging that the risks and harm caused by using Roundup were not disclosed. As part of the settlement, Bayer set aside over a billion dollars for future cases. Even then, they knew they’d need it, as 35,000 plaintiffs held out from the 2020 settlement agreement. In the years since, Bayer has settled some cases, successfully defended others, and has persuaded the courts to lower damages from billions to hundreds of millions in still others. In one case, the plaintiff simply quit mid-trial, which the judge accepted with prejudice. That said, Bayer hasn’t been able to stop the flood of cases. In 2022, the Supreme Court refused to block further cases against Bayer, which–as of March 2024–have now climbed to over 54,000. 

Despite all the litigation troubles and potential harm to consumers, and Bayer’s claim that it will stop selling the glyphosate product for home and garden use in 2023, you can probably still find Roundup at your local hardware store, at least in most places (it’s also widely available online). They do, however, have an “exclusive formula” that is glyphosate-free, though who knows what kind of cancer that might allegedly cause years down the road. You can also log into your Robinhood brokerage and swipe up on some shares of Bayer. In any case, you’re taking a bit of a risk.

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