“There is no question that the settlement agreed between the German Bayer Group and the lawyers of the Roundup plaintiffs is an act of liberation.
Almost exactly two years after the 63 billion euro takeover of the US group, Bayer is taking a further USD 12.1 billion to resolve at least the bulk of the litigation surrounding Monsanto’s products – including the sales hit Roundup with the controversial active ingredient glyphosate. The great uncertainty that has weighed on the Group so far is thus gone.
What remains is the question of whether it was really worth it. After all, the acquisition of the controversial US genetic engineering specialist Bayer has now cost around 75 billion dollars. Not to mention the share price crash, which has lost about 30 billion dollars in market capitalization since the takeover.
Bayer has nothing to do with “Stupid German Money”
Nevertheless, the takeover is not a case of “Stupid German Money”. The Germans in particular are often accused of investing their money badly abroad. A prime example is the entry of the Landesbanks, which had high-risk mortgage securities swarmed up shortly before the onset of the financial crisis. Deutsche Bank, which wanted to become the big number on Wall Street by buying Bankers Trust, also belongs to this category.
Bayer is different, even if the management has made big mistakes. All too much of the Leverkusen planners have lost their strategic vision of the global health and agricultural group, underestimating the immense litigation risks and the American legal system.
After all, Monsanto has for many years been regarded not only as a highly innovative company, but also as a devil’s company because of its aggressive business practices. The flood of lawsuits, the stock market crash, the lost trials before the jury – all this has cost the traditional Bayer company a lot of prestige over the past two years and deeply unsettled employees and shareholders.
Nevertheless, the idea behind the takeover remains quite convincing. As a result, Leverkuseners have become the number one market that is crucial for food and agriculture worldwide. Innovative solutions are needed in times of climate change, uncertain harvests and a growing world population.
From a European point of view, it can only be an advantage for a German company to be at the forefront of this otherwise very American and Chinese future market – and thus also to give a strong voice to European ideas on food and agriculture.
Now that the biggest procedural risks have been eliminated, Bayer now has the opportunity to prove to the world that the wedding to the supposed devil company Monsanto may have been overpriced, but it wasn’t so stupid. However, management no longer has many opportunities to turn the vision into a permanently attractive business model.