(Ecofin Agency) - Could Monsanto become a threat to the German agrochemical giant Bayer’s financial health ? This hypothesis is no more discarded by many experts after the failure, lately, of Monsanto, the American group bayer bought for $63 billion.  

Monsanto has been condemned by the American justice to pay about $290 million, to an American farmer, for hiding the hazard profile of its weed killer Roundup, whose active ingredient (glysophate) is said to be the cause of an incurable cancer affecting the farmer. Though Bayer refuted the claim that glysophate could cause cancer by citing “scientific evidences and regulatory assessments around the world”, and announced that it would appeal against the judgment, the case could have far-reaching consequences.  

Let’s note that the group which became the sole owner of Monsanto in June 2018, lost €10 billion on the stock exchange on Monday.

Apart from this loss, the ruling could set the pace for other open cases in the United States and make the group finally lose $5 billion, according to Alistair Campbell from the equity research fund Berengberg, referring to some former cases in the World. “Whilst an appeal is certain and may indeed likely result in the penalty being moderated at a minimum if not reversed altogether, a large number of similar pending cases will now likely multiply”, Barclays analysts commented. This would be a hard outcome for Bayer which would have to borrow $30 billion to pay the price agreed when buying Monsanto.

In addition, to become leader of the insecticides, fungicide and seeds market, the company sold a record $9 billion of its shares to BASF, its compatriot.  

"We think the risk of withdrawal (of Roundup, ed.notes)is extremely low, but if it materializes it would be a major blow to the transaction value paid for the company [Mosanto]”,  Campbell said adding that the controversy could affect the group’s revenues in the future.  

Let’s remind that Roundup was launched in 1976 and makes 25% of the world’s herbicide market.

Espoir Olodo