The regional court in Cologne has given the go-ahead for a lawsuit to proceed before the city’s higher regional court filed by a group of investors, including pension funds, for damages in connection with the acquisition of Monsanto by Bayer.
The Cologne regionla court issued an order based on the Kapitalanleger-Musterverfahrensgesetz (KapMuG) – a law guiding legal cases in the event of false, misleading or omitted public capital market information.
The court’s ruling contains so-called “determination targets” for omitted and incorrect ad hoc disclosures by Bayer in connection with the takeover of Monsanto.
“The order contains the work plan for the Cologne higher regional court, so that the lawsuits of the investors against Bayer can now be processed,” said Axel Wegner, a lawyer at TILP, the law firm that brought the case in court on behalf of investors.
Christian Herrmann, another lawyer at TILP, added: “On the basis of the order, the higher regional court in Cologne will now make a binding determination as to whether Bayer has breached its duty to conceal significant risks from the takeover of Monsanto from the capital market since September 2016, and has made itself liable to investors for breach of ad hoc obligations.”
Bayer announced on 23 May 2016 that it wanted to take over Monsanto, and the deal was completed on 7 June 2018 with Bayer paying over $63bn for the US group.
Investors including banks, capital management companies, reinsurance companies and pension funds from Germany, other member states of the European Union, North America, Asia and Australia, and private investors, have sued Bayer for damages after the company was ordered in court proceedings in the US to pay for damages for the use of the herbicide ‘Roundup’ developed and sold by Monsanto.
In the lawsuit – based on the purchases of Bayer’s shares for the period between 14 September 2016 and 19 March 2019 – investors believe Bayer deceived capital markets about the actual economic risks of the $63bn takeover of Monsanto.
Investors are asking for damages of around €2.2bn.
The risks resulted specifically from lawsuits pending in the US in connection with the use of glyphosate and the herbicide Roundup, in which Monsanto was ordered to pay large sums in damages, according to the law firm.
The court proceedings that took place between 10 August 2018 and 13 May 2019 wiped out over €30bn in market capitalisation for the company, it added.
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