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MarketScreener Homepage  >  Equities  >  Xetra  >  Bayer AG    BAYN   DE000BAY0017

BAYER AG

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Bayer's Legal Woes Escalate With Probe Into Monsanto File

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05/13/2019 | 02:54pm EDT

By Ruth Bender

BERLIN -- Bayer AG on Monday sought to limit the damage after French prosecutors said they had opened an investigation into potentially illegal practices by Monsanto Co. before it was acquired by the German chemicals and drugs giant.

The latest legal complication to engulf the company came hours before Bayer announced it had sold one of the consumer-goods brands it had put up for sale in an effort to cut costs and refill its coffers.

French authorities confirmed the criminal probe came after local media reported that, in 2016, Monsanto and a public-relations firm it had hired had compiled a file of some 200 French personalities and where they stood in the divisive debate over the alleged health risks of herbicide glyphosate. If such data included sensitive personal information that wasn't publicly available, the list might be in breach of French and EU data privacy law.

"We apologize for what came to light here," Matthias Berninger, Bayer's recently appointed head of public affairs and sustainability told reporters. "This is completely unacceptable."

Monsanto's past has been haunting Bayer ever since the German inventor of aspirin completed the acquisition of the U.S. company a year ago. Bayer faces some 13,400 lawsuits alleging Monsanto's Roundup weedkillers, which contain glyphosate, cause cancer.

Bayer's share price has fallen nearly 40% since the company lost the first two trials in court, prompting investors to revolt against management at a recent general meeting. A jury in a third trial is due to give its verdict any day. Bayer has said glyphosate and Roundup are safe, and it is appealing the verdicts.

Bayer is also under pressure to fix problems in its other businesses, from drugs to consumer care. The company late Monday said it would sell its Coppertone sunscreen brands to German consumer-care group Beiersdorf AG for $550 million, a first in a series of asset sales Bayer is planning as part of a broader restructuring.

Bayer said on Monday it was likely that Monsanto and U.S. public relations agency FleishmanHillard had drawn up similar lists across other European Union countries, suggesting it expected more revelations could emerge.

FleishmanHillard said in a statement that it was "committed to ethical conduct" and being "legally compliant in its activities, including the handling of information."

Monsanto for years has been a target for environmental activists who often criticized the company's aggressive lobbying tactics. In addition to the legal liabilities Bayer is struggling to compute, many investors fear Monsanto's controversial reputation, which they think has now infected its new owner.

Mr. Berninger, a former Greens member of parliament in Berlin whom Bayer hired at the start of the year, said he had discovered some questionable Monsanto tactics in his first months on the job that weren't in line with Bayer's ethics.

While he said the French probe had yet to determine whether the list-making was indeed illegal, he hinted Monsanto might have overstepped the line.

"When you collect data that is not publicly available about individuals, a Rubicon is clearly crossed," Mr. Berninger said.

Bayer said it had also hired an external law firm to conduct its own investigation into the practices and that it was fully cooperating with French authorities. Mr. Berninger said that Bayer was prepared to dismiss personnel if needed and that it had suspended its work with the communication firm under investigation.

While so-called stakeholder mapping -- the process of identifying influential players and their stance on an issue -- is common practice in public relations, French media reported that the file included data that can't be collected without a person's consent under European privacy law.

According to the reports, the list included the personalities' stance on glyphosate and whether Monsanto was likely to be able to influence them as it was seeking the renewal of the EU license for the chemical.

French newspaper Le Monde filed a complaint in France after it and public broadcaster France 2 obtained access to the list that included some of its own journalists as well as researchers and lawmakers.

Mr. Berninger said Monsanto had a contract with FleishmanHillard to work across Europe at the time, which is why similar lists might exist in other countries. French PR firm Publicis was also involved in compiling the file, French media said.

Clément Léonarduzzi, president of Publicis consultants in France said his company had launched an internal audit to investigate possible illegal acts. Most of the people who had worked on the project -- for which Publicis had been paid $20,000 -- had left the group, he said.

--Nick Kostov contributed to this article.

Write to Ruth Bender at Ruth.Bender@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
BAYER AG 1.48% 53.29 Delayed Quote.-13.26%
BEIERSDORF AG 0.60% 108.2 Delayed Quote.17.92%
PUBLICIS GROUPE -0.08% 50.14 Real-time Quote.0.20%
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Financials (€)
Sales 2019 46 538 M
EBIT 2019 8 087 M
Net income 2019 3 662 M
Debt 2019 37 751 M
Yield 2019 5,43%
P/E ratio 2019 14,09
P/E ratio 2020 11,34
EV / Sales 2019 1,87x
EV / Sales 2020 1,75x
Capitalization 49 304 M
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Average target price 77,5 €
Spread / Average Target 47%
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NameTitle
Werner Baumann Chairman-Management Board
Werner Wenning Chairman-Supervisory Board
Wolfgang U. Nickl Chief Financial Officer
Katharina Jansen Head-Science & Research
Hartmut Klusik Head-Human Resources, Technology & Sustainability
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