Could Bayer face bankruptcy because of its acquisition of Monsanto? There is reason to consider that as a possibility. The stock has suffered this year, so that the entire company is now worth less than the $60 billion it paid for Monsanto last year. The most obvious risks relate to corrupt practices in Europe and illnesses caused by the herbicide Roundup in the United States, but problems run much deeper than that.
It was a $2 billion verdict in favor of two people who got cancer after exposure to Roundup that made the biggest headlines, but there are thousands of lawsuits on behalf of people sickened or killed by Roundup. Facing a likely liability of millions of dollars per case, the lawsuits already in the courts might be enough to bankrupt the company. And virtually every person and animal in the world has some degree of Roundup exposure, so the civil liability could be thousands of times larger, and one has to wonder how long it will be legal to sell Roundup over-the-counter. The desperation in Bayer’s position is easily seen in its public statements, in which it says its plan is that all of the Roundup cases will be overturned on appeal, an outcome that legal observers say is unlikely.
In Europe, the company collected files on p.r. targets with detailed information that appear to go beyond what European law allows. An investigation is underway in multiple countries. That is, it looks like the company was preparing to bribe and blackmail journalists, scientists, and others and may indeed have done so already. Though Bayer so far has been able to distance itself from what it says was a Monsanto initiative, Bayer’s own history is dodgy enough and there is no telling what an investigation might turn up.
Roundup and blackmail are not two isolated problems at Bayer. Roundup is certainly not the only toxic product Bayer sells. Toxicity is inherent in the fields it works in. So too, apparently, is deceptive marketing. The agribusiness sector that Bayer tries to dominate uses, to cite just one example, pictures of cows in fields to sell milk from cows kept in concrete cells. When examined, this will likely be found to be illegal in countries like the U.K. that have truth in marketing laws.
Even in the absence of scandal, Bayer may have accumulated so much market clout that it works against the company's fortunes. Bayer depends on national laws to protect its exclusive rights to product categories at the same time that it wields its clout against those countries’ national economies. Countries are likely to respond defensively with technical legal changes to reduce the risks. Technical changes in the legal status of seeds would be too obscure to explain to the broader public but could pull the rug out from under Bayer’s dominant market position in one country after another.
No one disputes that Bayer blundered badly in its acquisition of Monsanto. Is it too late for the company to recover? Maybe not, but I don't think anyone can say with confidence.
