Shares in German pharmaceuticals and chemicals giant Bayer have taken a dive to their lowest level in five years. Investors reacted to a shock US ruling against Monsanto, which now belongs to the Leverkusen-based firm.
Shares in German chemicals behemoth Bayer tumbled more than 10 percent only half an hour into regular trading on Monday morning.
Stock in the Leverkusen-based group fell 10.4 percent to €83.61 ($95.19) during the first 30 minutes of trading on the Frankfurt Stock Exchange.
It was a market reaction to a California court ruling last Friday when a dying groundskeeper was awarded damages of almost $290 million, with the judges finding that Monsanto — now belonging to Bayer — should have warned buyers that its flagship Roundup weed killer could cause cancer.
Bayer shares dropped to their lowest level since late 2013, preventing an otherwise rather bullish DAX index of the country's 30 largest blue chips from rising.
The California court decision had come just weeks after Bayer sealed its mammoth takeover bid for US firm Monsanto in one of the largest transactions in German corporate history.
Aware of the reputation of Monsanto, which specializes in genetically modified seeds and crop protection technologies, Bayer said it planned to ditch the Monsanto name once the takeover was complete.
While observers predicted that thousands of other claims could follow, Bayer said the California jury's findings went against scientific evidence and that other courts "might arrive at different conclusions."
Analyst Michael Leacock of the European financial services firm MainFirst said the uncertainties surrounding further claims against Monsanto were likely to have a long-term impact on Bayer's shares.
hg/aos (AFP, Reuters, dpa)