By Adria Calatayud

Bayer shares gave up gains from a rally triggered by its plan to settle legal battles over Roundup weedkiller, which prompted the company to increase litigation provisions and forecast it would burn cash this year.

Shares in the German pharmaceutical and agriculture conglomerate fell as much as 10% in European morning trading Wednesday and wiped out their gains on Tuesday, when the stock shot up 7% before the closing bell. Still, Bayer's shares have more than doubled their value over the past year.

The company has grappled for years with uncertainty stemming from claims the key ingredient in Roundup, glyphosate, causes cancer, which the company denies. The prospect of hefty litigation payments loomed over Bayer since it closed its $63 billion acquisition of Monsanto in 2018 and, more recently, the company's debt levels and setbacks in its pharma business added to investor concerns.

Bayer said it proposed to settle a nationwide class-action lawsuit aimed at resolving current and future claims that its flagship herbicide causes cancer and agreed to pay up to $7.25 billion in declining annual installments for up to 21 years.

As a result, the company said it would hike its litigation provisions to 11.8 billion euros ($13.99 billion) from 7.8 billion euros previously, and that expected litigation payouts of 5 billion euros in 2026 would result in a cash outflow for the year.

The settlement requires court approval in Missouri, where the bulk of Roundup cases are outstanding, and comes as Bayer awaits a U.S. Supreme Court decision on its challenge to Roundup litigation. The company said both were independently necessary.

The proposed settlement, together with the Supreme Court case, provides a path out of the litigation uncertainty, Bayer Chief Executive Bill Anderson said.

The company signed a bank loan of $8 billion to cover the immediate funding and aims to ultimately use debt, with no plans for a capital increase, Chief Financial Officer Wolfgang Nickl said in a call with analysts Tuesday.

Bayer's moves show the cost of increased certainty, analysts at Morgan Stanley wrote in a note to clients. The proposed settlements create a framework to contain the glyphosate litigation at the cost of increased future indebtedness, while separate litigation on chemicals known as polychlorinated biphenyls, or PCBs, seems largely contained with new settlements Bayer disclosed, the analysts said.

While Bayer has taken a significant step in the right direction for resolving Roundup litigation, the need of court approval and the possibility that a high rate of claimants opt out of the agreement remain key considerations, analysts at J.P. Morgan said.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

February 18, 2026 06:20 ET (11:20 GMT)

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