Bayer (BAYN) Investor update summary

Settlement agreement and litigation containment

• Announced a proposed nationwide class settlement in the U.S. glyphosate litigation, covering current and future Roundup claims alleging Non-Hodgkin lymphoma injuries, pending court approval.

• Settlement involves capped, declining annual payments over up to 21 years, totaling up to $7.25 billion, aiming for speed and closure over prolonged litigation.

• Supreme Court review of the Durnell case is critical for addressing cases not covered by the settlement and for regulatory clarity, with the class settlement and Supreme Court case being mutually reinforcing.

• The class settlement is open to all plaintiff law firms and covers those exposed to Roundup before February 17, 2026, with NHL diagnosis now or within 16 years of final approval.

• Separate confidential settlements reached for certain PCB and additional glyphosate cases, including environmental cases in Illinois and West Virginia.

Financial impact and funding

• Litigation provision increased from EUR 7.8 billion to EUR 11.8 billion, with about EUR 9.6 billion for glyphosate and EUR 1.9 billion for PCB, and a first estimate of EUR 5 billion in litigation payouts in 2026, leading to expected negative free cash flow that year.

• Largest annual payments will occur in 2026, with annual litigation-related payments expected to be around EUR 1 billion for five years after 2026, then drop significantly.

• Immediate financing secured with an $8 billion bank loan facility; long-term plan includes senior bonds and equity-credit instruments.

• No plans to use the previously authorized capital increase for funding.

• No admission of liability or wrongdoing in the settlements; regulatory bodies continue to find glyphosate-based herbicides safe and non-carcinogenic.

Settlement structure and process

• The class settlement is a long-term compensation program, up to 21 years, with tiered payments based on exposure, age, and NHL type, managed by a professional claims administrator.

• Members will be notified and can object or opt out; excessive opt-outs allow Monsanto to terminate the settlement, though the opt-out threshold is undisclosed and must be very high.

• The settlement covers only NHL claims related to Roundup, not other conditions.

• The process includes preliminary court approval, notice to class members, a fairness hearing, and potential appeals.