Bayer’s stock slumped more than 10 percent in trading Monday, three days after a California jury awarded $289 million to a former groundskeeper who said the popular weedkiller Roundup gave him terminal cancer.
The stock drop sent a cautionary signal to the company that acquired Monsanto, the maker of the weedkiller, in June for $63 billion. The merger created the world’s largest seed and agrochemical company, marrying Monsanto’s dominance in genetically modified crops with Bayer’s pesticide business. Bayer’s portfolio also includes pharmaceuticals with such household brands as Aleve to Alka-Seltzer.
The verdict poses a new challenge for Bayer in its quest to combat contempt swirling around Monsanto by consumer, health and environmental advocates. For years, the company has drawn sharp criticism and allegations about the health hazards caused by Roundup, and Monsanto faces thousands of lawsuits that assert its product is linked to cancer diagnoses.
Monsanto’s reputational problems are now Bayer’s problems, said Anthony Johndrow, a corporate reputation adviser. Lawsuits against Monsanto are nothing new, Johndrow said, adding that Bayer risks souring sales of its other products because of the public perceptions of Monsanto. [Continue reading…]