Judge approves $38 million class action settlement over Monsanto merger

SAN FRANCISCO (CN) — A federal judge granted final approval to a $38 million class action settlement in a case against Bayer over shareholders’ claims the German pharmaceutical giant didn’t conduct adequate due diligence before making a multibillion-dollar deal to acquire Monsanto.

Shareholders sued Bayer in 2020, claiming the company misled them about the litigation risk of purchasing the agrochemical company, whose signature weed killer product Roundup was found to have caused people to develop cancer in three bellwether jury trials.

Plaintiffs argued that Bayer forged ahead with the Monsanto acquisition while downplaying the litigation risk to investors and representing that glyphosate, the active ingredient in Roundup, is non-carcinogenic.

​​The $63 billion deal was struck in 2016 but was not made final until June 2018. Two months later, a San Francisco jury found Monsanto liable for $250 million in punitive damages in the case brought by a school groundskeeper with non-Hodgkin lymphoma.

By then, plaintiffs say, Monsanto had racked up thousands of additional personal injury lawsuits, and Bayer’s post-merger American depositary receipts plunged significantly.

The parties initially reached an agreement in February, and the settlement was preliminarily approved in June by U.S. District Court Chief Judge Richard Seeborg, a Barack Obama appointee.

The agreement awards plaintiffs over 9% of the $417 million estimated maximum damages. Nearly $10 million of the settlement will be allocated to attorneys’ fees, with $3.3 million set aside for reimbursement of litigation expenses.

Over 278,000 class notices were sent to potential class members, leading to more than 153,000 claims as of Oct. 24, Seeborg said in the final approval order.

In a statement to Courthouse News, a Bayer spokesperson said the agreement resolves all future claims for the settlement class and does not reflect any admission of wrongdoing or liability.

“The Company is pleased that this litigation has been brought to a conclusion and that it can put this matter behind us,” they said.

Carol Gilden of Cohen Milstein, an attorney for the plaintiffs, told Courthouse News she was pleased with the settlement, describing the case as a “hard-fought dispute.”

“This was an important securities class action that re-affirms ADR investor rights and the long arm of Uncle Sam to hold foreign companies accountable to U.S. securities laws,” she said.

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