Bayer Considers Bankruptcy for Monsanto Amid Legal Pressures

ST. LOUIS, Mo. — Bayer AG is considering filing for bankruptcy for its subsidiary Monsanto in response to mounting legal challenges linked to the herbicide glyphosate. The German company is evaluating a Chapter 11 restructuring in Missouri, where many of the lawsuits are concentrated.

This move aims to shield Bayer from further financial liabilities, particularly if negotiations for an out-of-court settlement fail. To navigate this complex situation, Bayer has retained restructuring experts from Latham & Watkins and AlixPartners to explore available options.

Since acquiring Monsanto for $63 billion in 2018, Bayer has faced numerous lawsuits alleging that the use of Roundup, which contains glyphosate, caused cancer in users. While Bayer maintains that the product is safe when used as directed, it has opted to withdraw Roundup from domestic use in the U.S. to mitigate legal risks.

The potential bankruptcy has met with a positive reaction from market investors, with Bayer shares rising by 1.6% on the Frankfurt stock exchange, leading gains in the DAX index ahead of the opening. Investors view this as a feasible solution to manage high legal costs and minimize reputational damage faced by the German firm.

Although filing for bankruptcy poses legal challenges and the risk of damaging Bayer’s image, it could provide a path to manage the financial impact of thousands of lawsuits related to glyphosate.

Bayer aims to end a conflict that has diminished its stock value and distracted its focus from sectors such as pharmaceuticals and agricultural genetic research. With billions already allocated for damages, the future of Monsanto within Bayer appears increasingly uncertain as the company prepares for this complicated legal process.