By Mauro Orru 



  An appeals court in San Francisco ruled on Wednesday that the U.S. Environmental Protection Agency should revoke its registration of three dicamba-based products, including Bayer AG's XtendiMax, saying the agency failed to acknowledge associated risks. 


  The U.S. Court of Appeals for the Ninth Circuit said it would be forced to vacate the registration decision for the herbicides, citing a lack of substantial evidence to support the EPA's decision. 


  The EPA had issued conditional two-year amended registrations for Bayer's XtendiMax, Corteva Inc.'s FeXapan and BASF SE's Engenia. 


  "The EPA substantially understated the risks it acknowledged, and it entirely failed to acknowledge other risks," the court said, including the amount of dicamba herbicide that had been sprayed on post-emergent crops, evidence showing dicamba damage was substantially under-reported, and anti-competitive economic effects in the soybean and cotton industries. 


  The ruling comes after a group of environmental organizations filed a petition with the court. 


  "We strongly disagree with the ruling and are assessing our next steps. We will also await direction from the EPA on actions it may take in response to the ruling," a spokesman for Bayer told Dow Jones Newswires on Thursday. 


  "Depending upon actions by the EPA and whether the ruling is successfully challenged, we will work quickly to minimize any impact on our customers this season." 


  At 0825 GMT, Bayer shares traded 2.5% lower at EUR63.69. 


  Corteva and BASF weren't immediately available for comment. 


  The announcement comes nearly four months after a federal court in Missouri ruled against Bayer and BASF in a crop-damage case, awarding $265 million to a Missouri peach farmer who claimed the companies encouraged farmers to irresponsibly spray a hard-to-control weedkiller. 


  Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94