BERLIN, Aug. 13 (Xinhua) -- The share price of German agrochemicals giant Bayer AG has dropped by more than 10 percent on Monday after a U.S. court ordered its subsidiary Monsanto to pay a total of 298 million U.S. dollars in damages for selling a carcinogenic weed killer.
Bayer's shares were the worst-performing in the DAX stock index in early Monday trading, reflecting concerns amongst investors that the court ruling could spark further legal action shortly after the Leverkusen-based completed its 63-billion-dollar takeover of Monsanto in June.
Critics of the merger have repeatedly warned that Bayer could suffer reputational damage from the move given that Monsanto is mainly known in Europe as the producer of the controversial pesticide glyphosate.
Late last week, U.S. judges found Monsanto guilty of selling the glyphosate-based weed killer "Roundup" without adequately warning consumers that it could cause cancer. In the widely-publicized court case, a terminally-ill groundskeeper who contracted a type of blood-cell cancer after exposure to glyphosate was awarded 39 million dollars in personal compensation.
The plaintiff argued successfully that Monsanto had "fought science" over the course of several years in a bid to falsify and obscure evidence of the damaging effects which Roundup has on human health.
Monsanto is planning to appeal the verdict and rejects the court's assertion that glyphosate, the world's most widely-used pesticide, caused cancer.
Bayer chief executive officer (CEO) Werner Baumann recently announced that "Monsanto will no longer be a company name" following its acquisition. The products of the U.S. agrochemical company will instead become fully-integrated into Bayer's own marketing portfolio.
In order to meet regulatory requirements, Bayer has agreed to sell business units with combined revenue of 2.2 billion euros to German rival BASF for 7.6 billion euros. The U.S. Department of Justice accepted this step as being sufficient to prevent Bayer-Monsanto from becoming too dominant in any of the markets of the merged entity.
Earlier, the European Union (EU) Commission decided to recognise BASF as an appropriate buyer for all of Bayer's divested units. Under U.S. antitrust regulations, the formal integration of Monsanto into the corporate structure of Bayer could only commence once the Bayer-BASF deal was completed.
Having cleared all regulatory hurdles, Baumann told press that Bayer would now turn to focus on achieving the synergy effects anticipated by from the merger. The CEO described the takeover as a "strategic milestone" but warned that its success would ultimately hinge on "developing a joint corporate culture".
