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Bayer Launches Dedicated Unit for US Roundup Production After Legal Win

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Bayer Launches Dedicated Unit for US Roundup Production After Legal Win

Bayer (BAYN.F) on Wednesday launched Ruveon as the holding company for the business responsible for producing its Roundup weedkiller, which has faced legal trouble over allegations that it causes cancer.

The German drug-making and crop science company consolidated its US glyphosate operations under Ruveon in a move aimed at streamlining the business for the demands of the US market. Based in St. Louis, Missouri, Ruveon will supply the US agriculture industry with "critical glyphosate products and the highest standards of quality and service," according to a release.

Bayer said the consolidation of its US glyphosate business is part of the group's five-year strategy for its crop science division. The company noted that Ruveon remains a Bayer group business.

The move came days after the group secured a major legal victory in the US last week as the Supreme Court ruled in its favor on failure-to-warn claims over glyphosate labelling. While the ruling did not erase all legal risks, industry observers believe the decision will significantly reduce payouts related to Roundup cases.

"In our view, the decision should significantly contain the litigation by driving dismissal of current warning-based claims and effectively barring future failure-to-warn claims. Given that warning-based theories make up the vast majority of claims to date, this should materially reduce verdict volatility, weaken plaintiffs' settlement leverage and improve visibility on future cash outflows," mwb research said after the Supreme Court ruling.

Bayer shares gained more than 5% in early morning trading.

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