Bayer’s Supreme Court Showdown Arrives as Legal Bills Drain Cash and Investors Demand More

Bayer's CEO touts restructuring progress, but negative cash flow and a $11.8B legal overhang overshadow the Supreme Court glyphosate case.

The courtroom clock is ticking louder than the earnings calls at Bayer. On Monday, the US Supreme Court hears oral arguments in the Durnell case, a pivotal moment that could reshape the legal landscape for the German conglomerate’s glyphosate liabilities. But even as the company’s CEO, Bill Anderson, hails the hearing as a milestone, the financial reality at home is growing darker.

Shareholders gathered virtually on Friday for the annual general meeting, where the mood was a mix of cautious optimism and outright frustration. The stock fell nearly 4% to €38.50 during the session, though it has still managed a 71% gain over the past twelve months. The selloff reflected unease over a cash flow outlook that has turned deeply negative for the current year.

A Radical Overhaul Meets Skepticism

Anderson has been pushing through one of the most aggressive restructuring programs in Bayer’s history. Since the overhaul began, roughly 14,000 jobs have been cut, with 4,700 eliminated last year alone. The CEO argues that the new organizational model is already bearing fruit, with operating efficiency improving and no division left untouched.

But major institutional investors are not convinced that cosmetic changes will suffice. Representatives from Deka, DWS, and Union Investment pressed for a more fundamental debate on the corporate structure once the legal overhang is resolved. Ingo Speich of Deka called for an open-ended review, signaling that the current trajectory may not be enough to secure long-term support. Despite their reservations, the fund managers indicated they would approve the board’s discharge for the past financial year.

The Legal Albatross Weighs Heavily

The numbers tell a stark story. Bayer booked a net loss in the billions for 2024, and provisions for legal risks have ballooned to €11.8 billion. The main culprit is the glyphosate litigation, with the company expecting around €5 billion in cash outflows this year for settlements alone. That has pushed the free cash flow forecast into negative territory, forcing management to propose a minimum dividend of just €0.11 per share for 2025.

The Supreme Court case, Durnell, centers on whether federal law preempts state-level warning requirements for glyphosate. A victory for Bayer could undercut more than 65,000 pending lawsuits. A ruling is expected by June 2026. In the meantime, the company is also pushing forward with a separate class-action settlement in Missouri, which a judge has already preliminarily approved at $7.25 billion.

Pharma Pipeline Offers a Glimmer of Hope

On the operational front, the pharmaceuticals division is providing some ammunition for Anderson’s strategy. The drugs Nubeqa and Kerendia posted combined growth of 68% in 2025, and management now sees blockbuster potential for Kerendia. Positive clinical data for the stroke candidate Asundexian have also bolstered the pipeline.

The board has been shoring up leadership for the long haul. Judith Hartmann will take over as chief financial officer at the end of May. Anderson’s own contract has been extended through March 2029, and pharma chief Stefan Oelrich is now locked in until October 2029.

The Numbers That Matter

For the full year, Bayer expects currency-adjusted revenue between €45 billion and €47 billion, with operating earnings around €10 billion. The new organizational model is projected to contribute €2 billion to the bottom line. The first real test of those savings will come on May 12, when the company releases first-quarter results.

Analysts remain split on the outlook. Barclays has a buy rating on the stock with a price target of €48, betting that the glyphosate issue will eventually be resolved. But in the near term, the shares remain highly sensitive to legal headlines. The next major inflection point is Monday’s oral arguments in Washington — a session that could either lift a cloud or deepen the storm.