Bayer’s first mistake was buying and overpaying for Monsanto. Lex had previously argued the $63bn deal ranks among the worst in corporate history. That still stands. Bayer’s second mistake was not settling sooner. By allowing three cases to go to jury trials only to lose them, Bayer opened the floodgate for countless more Roundup lawsuits. At the last count, there were 125,000 filed and unfiled claims overall, according to Bayer. Management had severely underestimated the mass tort machine that powers America’s product litigation industry.
At around €72bn, Bayer’s market value is just half of where it was in 2015. Shareholders, faced with such value destruction, would be within their right to agitate for radical change. Critics have urged Bayer to split its pharmaceutical and agricultural products businesses. They say there are few synergies between them. Goldman Sachs, doing a sum of the parts analysis, thinks the company, broken up, could be worth €112bn.
