It will go on record as one of the worst investment buyouts of the 21st century.
Ignoring decades of condemnation by various environmental and health advocacy groups, the German company Bayer acquired Monsanto for $63 billion in 2018. Monsanto produces Roundup, the controversial herbicide containing glyphosate that is banned in many European countries.
In response to a Californian court ruling in favor of a plaintiff claiming Roundup causes cancer, lawsuits against Bayer in the U.S. surged to nearly 43,000 from 18,400 last year.
While Bayer’s net income rose 7.5 percent in the third quarter, it was 71.9 percent lower than last year… and net income shrunk 63.9 percent.
TREND FORECAST: Bayer is the 17th largest independent biotech company, with a market cap of $63.1 billion. Although it is diversified, we forecast that the ongoing Roundup lawsuits will continue to put downward pressure on the company’s profits.
Moreover, while Roundup is legal in the U.S., as the lawsuits increase and gain more media attention, it may well be banned in America and the other nations that currently permit its use. We forecast this, despite Bayer’s chief executive, Werner Baumann, insisting that they “remain convinced of the safety of glyphosate-based products, as do all the regulatory bodies worldwide.”