Banks dragged into legal action over Bayer-Monsanto deal

Advisers to the Bayer-Monsanto takeover have been dragged into a lawsuit against the pharmaceuticals company that was originally filed in March.

Plaintiff Rebecca Haussmann, trustee of the Konstantin S. Haussmann Trust, filed the amended claim in New York County Supreme Court at the end of August. It named BOFA Securities, Bank of America, Credit Suisse Group and law firms of Sullivan & Cromwell and Linklaters as defendants, alongside Bayer's board, CEO Werner Baumann and Chairman Werner Wenning, who stepped down in April.

Haussmann claims the acquisition eroded the company’s share value by leaving it with potentially billions of dollars in liability from costly lawsuits over Roundup herbicide.

The action seeks compensatory damages for shareholders and disgorgement of “all compensation paid to the Bayer managers and supervisors who participated in bringing about this acquisition…”.

The claim alleges that the supervisors and managers at Bayer did not “employ the care of a diligent and conscientious manager, failed to obtain adequate information regarding the Monsanto acquisition and breached their duties to Bayer, and its shareholders, including their duties of loyalty, candor and truthful communications”.

It claims they abused their control of Bayer to advance their personal interests over and at the expense of the company.

The suit also claims that Wenning’s decision to step down came after Bayer improperly obtained a copy of the then-draft shareholder lawsuit “through corporate espionage”.

Bayer acquired global biotech giant Monsanto in June 2018 in what is widely seen as one of the worst acquisitions in history.

When it purchased the company it inherited a legacy of litigation accusing Monsanto of developing a cancer-causing weed killer called Roundup.

Bayer estimates there are over 45,000 plaintiffs currently making similar claims over Roundup, who allege Monsanto's glyphosate-based herbicides cause non-Hodgkin lymphoma, and that the company deceived customers about the risks.

The German chemical giant has so far paid out $13bn in global settlements and has acknowledged that the Roundup litigation may force it to sell assets.