BAYER: "Everything will be fine" - milestone with glyphosate!

Free Issue No. 03 dated 11.02.2021
Anyone familiar with US lawyers and US courts (US tax dispute sends its regards) knows that claims - justified or unjustified - are usually fixed in such a way that "painful" penalties may be incurred, but not existential sums that drive a company to ruin. The latter would result in a default of payment. Thus, it was always clear to us that an amicable, albeit "expensive", settlement would also be reached at the pharmaceutical and agrochemical company BAYER. Last week BAYER announced a breakthrough in the negotiations with the US plaintiffs and plaintiffs' lawyers (the latter earn a lot of money, USD 750 per hour is not uncommon). BAYER and the plaintiffs' attorneys have now resubmitted the revised settlement to the responsible federal judge for approval. If the judge approves the settlement, which is expected given BAYER's diligence in resolving the outstanding issues, BAYER should soon be able to put the US litigation behind it. The settlement package amounts to USD 11.6 billion, covering existing and future lawsuits and compensation payments (USD 2 billion over four years). The scientific panel to investigate the causality between glyphosate and cancer is to remain; however, new findings are no longer legally binding, thus meeting the court's demand. The milestone removes the great uncertainty!
What else? "Top-shot" and blue chip BAYER is doing very well and innovating. Its competitor in the agricultural sector, Corteva, has come up with good annual figures; their shares rose significantly after the results were announced. BAYER has so far only just, but nevertheless encouragingly, broken away from its long-term lows. Several analysts have now switched to "buy and outperform" after the "glyphosate milestone"; initial price targets are in the EUR 74 range! We remain higher at EUR 97!