In this section, we report on material, reportable risks pursuant to German Accounting Standard (DRS) No. 20. These include all financial and nonfinancial risks that have been classified as high or medium and are at least significant in terms of potential impact after taking into account the risk control measures in place (net risk). They encompass risks falling within the black outline in the rating matrix A 3.2.1/2. In addition, we report relevant risks that (from a financial point of view) may not be sufficiently or meaningfully assessable, if at all. We also report on the material opportunities identified in the course of our opportunity management. Furthermore, we assess the probability that the effects of individual risks could change significantly during the forecast period. Our most recent evaluation did not find this to be the case, with the following exception: Legal proceedings may generally involve substantial estimation risks. Against the background of the proceedings in the glyphosate matter and PCB matters, in particular, outcomes of mediation and/or the ongoing litigations may lead to adjustments of the provisions or liabilities in connection with these series of litigations. Such adjustments may materially impact the forecast issued with respect to the financial position and cash flows. See also Note [30] in B Consolidated Financial Statements.
Comparable risks existing in different divisions of the company are grouped together where applicable.
According to our understanding, risks relating to the aspects outlined in the German CSR Directive Implementation Act (CSR-RUG) that would need to be reported separately would have to be classified as having the highest level of potential impact under the qualitative criterion “potential impact on people and/or the environment,” and additionally their likelihood of occurrence would have to be classified as “very likely.” We did not identify any risks that meet said criteria in 2025.
The section below details the individual risk categories that fall within the “Risks to be reported externally” area outlined in the risk matrix, as well as how they have been classified1 and the divisions concerned. The order in which the risks are listed does not imply any order of importance. We also describe opportunities and risks of a division-specific nature where relevant. The divisions mentioned are those that have identified material risks. Other divisions may also be affected to a lesser extent. Material risks reported by enabling functions are categorized under “Group,” although they may also affect the divisions.
Social and macroeconomic trends (High: Group; Medium: Crop Science)
We continue to see an elevated risk arising from geopolitical shifts and tensions that may impact our global business. Competition between the United States and China, regional conflicts and an increasingly fragmented and polarized world order are challenging established economic paradigms and impeding capital expenditure decisions, supply chains and cross-border trade flows. While global trade remains highly interconnected, globalization is undergoing a period of major transition. Geopolitical developments remain volatile, especially with regard to potentially far-reaching policy decisions by the US government, e.g. in the trade context, potentially far-reaching restrictions by the Chinese authorities, e.g. in the context of export regulations, or respective retaliatory measures from both sides. This may lead, for example, to an adverse impact on the availability of components or materials and the Bayer Group’s ability to plan effectively. Established principles that have applied for decades, such as the rules-based order for trade and supply chains prioritizing cost efficiency to facilitate just-in-time production, are increasingly being called into question. This may have ramifications for our business environment: Fragmentation in various areas (e.g. capital markets, technological standards) is causing many states to become increasingly focused on securing access to critical commodities and strategically important technologies. This is increasingly leading to the introduction of restrictive commercial measures or investment controls relating to critical infrastructure, which may impact us directly or indirectly. Aspects relating to research and product registrations are also increasingly being discussed from a national security perspective and overshadowed by disinformation strategies. Geopolitical risks relate, for example, to Russia’s war in Ukraine, as well as to the Middle East and potential tensions between China and Taiwan. We see both direct risks for our production in Ukraine and our customers, as well as indirect risks through the impact on our suppliers and supply chains (see also the “Supply of products” section). The impact of wars generally has the potential to endanger the safety of our employees and customers while at the same time significantly affecting relevant markets for our business by, for example, impeding supply chains, pushing up energy and commodity prices, and giving rise to negative currency and economic effects. Such shifts could have a negative impact on our market environment. The geopolitical environment in which we operate is becoming increasingly harsh overall, which could also lead to increased attacks on critical infrastructure. We are responding to these challenges by undertaking global and local operational crisis management activities, operating cross-business and cross-function task forces, and diversifying our energy sources. In addition, we have a global geopolitics team in place within the Public Affairs department that consolidates our activities in this field.
The growing world population, coupled with rising food demand, gives rise to opportunities for our Crop Science Division. In addition, changing consumption patterns and increasing public awareness of the importance of healthy eating and sustainability, paired with new digital technologies, are generating new pools of value in the agriculture market. Therefore, while high-quality seeds and crop protection will remain at our core, we see opportunities to capture additional value by tapping new customer segments, sales platforms and digital capabilities, and to drive regenerative agriculture.
Furthermore, the aging population gives rise to opportunities for our Pharmaceuticals Division, with the incidence of chronic diseases on the rise and an increasing number of patients suffering from multiple conditions affecting their quality of life. To address the growing demand for innovative healthcare products to treat age-related diseases, our Pharmaceuticals Division has streamlined its R&D activities toward precision medicine with a narrower therapeutic area focus but a wider range of modalities.
Negative public perception toward Bayer and, on a general level, toward new technologies represents a risk. For example, the use of crop protection and genetic engineering in agriculture is frequently the subject of critical debates, potentially impacting not only our reputation but also regulatory decisions, which could, in turn, negatively affect the use and the availability of our products. The risk of an increasingly negative public debate that is not primarily based on science may, for example, lead to legislative and regulatory decisions that are unfavorable to Bayer, significantly limiting the use of our products or even resulting in voluntary or mandated product withdrawals. Social media and rapid information cycles may amplify misinformation or allegations, including through unauthorized or spoofed communications. We actively engage in debates of this nature since we firmly believe that transparency and societal acceptance are essential requirements that successful companies have to fulfill.
Furthermore, negative developments of a macroeconomic nature, such as crises in important sales markets for our company, could weigh on our business and reduce our earnings. Our seed and crop protection business in particular is cyclical and shaped by economic developments and factors, including fluctuating weather conditions that may adversely impact our Crop Science business. Severe impacts associated with climate change, such as extreme weather events, may affect agriculture, for example, through potential loss of harvests due to drought or flooding. Forecasts concerning climate change indicate that these risks are set to increase in the long term. We address these factors through our globally diversified business, flexible supply chain and comprehensive monitoring, and by taking climate change into account in the long-term alignment of our research and product development activities.
Market developments (Medium: Crop Science)
In the Crop Science Division, competition in the seed and crop protection industry may intensify further. The successful market launch of new generations of products is also partly dependent on external factors that we have only limited control over and that could have a negative impact, such as tighter regulatory frameworks and increased data requirements. In addition, new competitors entering the market as well as aggressive marketing and pricing strategies – not only for generic products – could have a largely negative impact on our profitability and market position. Furthermore, increasing digitalization in the agriculture sector could lead to the rise of new players and alter the market – possibly to our disadvantage. To take account of these developments, we are realigning our business models, engaging in scientific and commercial partnerships, and utilizing our own R&D capabilities.
We see opportunities for our Pharmaceuticals Division. Scientific breakthroughs in fields such as cell and gene therapy and precision medicine have expanded the toolbox of innovative therapies. This provides opportunities to cure patients with high unmet needs or even prevent diseases in the first place. At the same time, data science and AI are leading to improved diagnostic methods, enabling diseases to be diagnosed and treated in a more targeted way.
Regulatory changes (High: Group, Pharmaceuticals; Medium: Crop Science)
Our business activity is subject to extensive regulations that continue to evolve and may become more stringent, including in certain cases for reasons of a political nature. For example, with respect to the Crop Science Division, further restrictions could be imposed on the sale and use of various crop protection products, and approvals that have already been granted might not be extended following regular review by the authorities. In some cases, they are also subject to legal challenges. Such measures could potentially lead to product registrations and marketing authorizations being temporarily or permanently revoked. This could in turn result in financial losses from reduced sales of crop protection products as well as associated seed offerings. In this connection, there is also growing public debate around potential restrictions on the use of certain active ingredients that contain fluoride. The Pharmaceuticals Division could likewise face more challenging registration requirements. For example, discussions by regulatory authorities regarding the reclassification of chemical substances could lead to a decline in sales or restrictions on use. In addition, the pricing of pharmaceutical products could become more strictly regulated – not only for products already exposed to generic competition, but also for innovative, patent-protected products. This also encompasses uncertainties related to potential legislative actions or executive orders by the US government. Residues of agrochemical products or pharmaceutical compounds could also become subject to more stringent regulation. In addition, regulatory changes could affect agricultural imports from other parts of the world, potentially impacting our business activity in those regions. Regulatory changes could also cause uncertainty over our products’ patent protection, potentially resulting in financial losses that may even include the repayment of license fees. Higher product development costs and longer development times could necessitate adjustments to our product portfolio that may in turn negatively impact our reputation.
We counter such risks by monitoring changes in regulatory requirements in order to adequately address them within the company. Furthermore, our global business presence is built on our comprehensive product portfolio and supports our sustainability ambitions. In addition, we continuously adapt to new challenges by leveraging our research and development capabilities, undertaking acquisitions and engaging in collaborations, while also aligning our product portfolio to reflect anticipated changes. We also engage in continuous dialogue with the authorities in all major markets with the goal of promoting science-based decision-making. This aspect forms a central part of our efforts to mitigate potential risks.
Business strategy (Medium: Pharmaceuticals)
Our business strategy is geared toward innovation, which is inherently associated with risks. In our Pharmaceuticals Division, we see challenges in setting up new therapy platforms, such as for cell and gene therapy, and in further developing established therapeutic areas through innovative solutions. We may face negative financial repercussions and/or damage to our reputation, for example, if such risks were to materialize. We counter these risks by aligning our organization and our processes toward addressing existing challenges.
Research and development (High: Pharmaceuticals; Medium: Crop Science)
Across our businesses, we see opportunities arising from our innovation capabilities – both in the continued development of our brands and in the expansion of our research pipeline. In the Pharmaceuticals Division, opportunities arise from data science and from AI and associated new R&D methods that save time and enhance R&D productivity. In addition, new, unique screening technologies facilitate the identification of new lead structures to unlock previously undruggable targets, with the potential to develop innovative products. We also rely on networking, both within the company and with external partners, to boost our innovation capabilities. This stimulates the development of new products.
Technological advances in pharmaceutical product development may at the same time also represent a risk for our company should we not be in a position to play a role in shaping such advances. Securing access to new technologies and identifying a sufficient number of research candidates in general while also ensuring their appropriate development represents a particular challenge. Targeting in-licensing and acquisitions as additional ways to strengthen our company involves the risk that we may be unable to identify a sufficient number of suitable candidates on financially acceptable terms. We cannot ensure that all of the development candidates we currently have in our pipeline, or will have in the future, will be developed to the stage at which they are ready to be launched on the market, or that they will obtain their planned approval/registration or achieve commercial success. These goals may not be reached if, for example, we are unable to satisfy technical or capacity requirements or meet time constraints in product development, fail to achieve study objectives or do not allocate financial resources optimally. Delays or cost overruns may occur during product registration or launch. We counter this risk through holistic portfolio management, as well as by estimating the probability of success and prioritizing development projects.
At Crop Science, we anticipate that our innovation capacities and budgets will enable us to leverage opportunities and effectively tackle the challenges faced in developing and introducing product solutions in agriculture, including longer and more costly development cycles or stricter regulatory requirements. We plan to further capitalize on the strengths of our R&D platform to deliver pioneering technologies faster. In addition, we will leverage our existing expertise and strategically invest in new capabilities to unlock and capture new market segments.
At the same time, Crop Science also specifically addresses the challenges in the area of R&D. Primary factors here include the accelerated pace of innovation, driven by rapid technological advancements, as well as shifting regulatory frameworks and intense competition. Uncertainties surrounding innovation initiatives pose risks to the successful commercialization of new products and may potentially lead to missed market opportunities or a weakening of our competitive position. To address these risks and safeguard our strategic objectives and long-term competitiveness, we are focusing on continuous portfolio management as well as a dynamic resource flow for key projects, and strategically investing in competitive innovation.
Supply of products (procurement, production, logistics) (High: Group; Medium: Crop Science, Pharmaceuticals)
Despite all precautions, operations at our sites, or the sites of our suppliers and partners, may be disrupted by fires, power outages, process changeovers – including those due to restrictions on the use of certain chemical substances – or plant breakdowns, for example. In addition, some of our production facilities are located in areas that may be affected by natural disasters such as flooding or earthquakes. The materialization of any of these risks could lead to production disruptions or stoppages, result in personal injury and damage to our reputation, give rise to declines in sales and/or margins, and necessitate the reconstruction of damaged infrastructure. If we are unable to meet product demand, sales may undergo a structural decline because patients may in the meantime be receiving alternative treatments and may not switch back to our products. We address these risks by building up safety stocks and by spreading production across multiple sites, for example. Furthermore, an emergency response system based on corresponding Group regulations has been implemented at all our production sites.
Disruptions in our upstream supply chain, which includes, for example, the sourcing of raw materials or active ingredients from suppliers or partners, as well as the logistics processes involved, may also negatively impact our own supply capability. The substances we procure, and the companies that manufacture them, must meet all necessary regulatory requirements. These substances must also be suitable for fulfilling regulatory requirements further down the value chain. Certain materials, particularly in our Pharmaceuticals Division, are offered by only a small number of suppliers or a sole source, and any disruption could affect production and product availability. We counter these risks by establishing relationships with alternative suppliers, concluding long-term agreements, expanding inventories and producing raw materials ourselves. Supplier risks are regularly reviewed and evaluated.
As a result of geopolitical risks and the international (supply chain) disruption they are causing, risks relating to the availability of necessary production materials and supply chain stability, for example, remain at a high level. See also the “Social and macroeconomic trends” section.
Marketing, sales and distribution (Medium: Pharmaceuticals)
New product launches present particular challenges for our marketing and distribution organization, since assumptions about aspects such as the market and market circumstances may not materialize as anticipated. As a result, product launch concepts – including those related to clinical trials – and the planning or implementation of the distribution strategy could turn out to be inefficient or inadequate in terms of scheduling and could ultimately present a risk for sales of our products. We address these risks by conducting a forward-looking analysis of possible scenarios and devising suitable strategies for projects such as planned product launches.
Human resources (Medium: Group)
Skilled and dedicated employees are essential for our company’s success. Difficulties in recruiting, hiring and retaining urgently needed specialized employees (on a regional level) – also in view of competition between employers – and in employee development could have significant adverse consequences for our company’s future development. Developments such as the growing relevance of disruptive technologies and the company-wide implementation of our DSO operating model – which is designed to promote new ways of collaboration – mean that our employees will need to possess new, innovative skill sets. To counter these risks, we design appropriate recruitment measures and adopt a skills-based approach in our talent development activities based on our analysis of future requirements. In addition, we align our corporate culture toward diversity and employee needs based on data, analyses and insights, enabling us to tap the full potential of the labor market.
Information technology (High: Group)
Our business and production processes as well as our internal and external communications are dependent on global IT systems. Ensuring the optimal alignment of our IT architecture, which also encompasses the use of cloud-based services and management of any service providers commissioned for IT products, therefore represents a challenge. In this connection, any potential incidents at a cloud supplier, such as the outage of a cloud region or a security incident, or a shift in regulations could present a risk for our company due to the disruption that might be caused to our supply and value chains, for example. The confidentiality, integrity and availability of internal and external information systems and data are of fundamental importance to us overall. If the risk of a breach of confidentiality, integrity or availability were to materialize, for example due to (cyber) attacks, it could lead to the manipulation and/or uncontrolled outflow of data and knowledge, and to reputational damage. Such attacks may also be carried out by in-house personnel. Our business and/or production processes could also be temporarily disrupted by (cyber) attacks. Driven largely by new country-specific data protection regulations, the rapidly evolving regulatory environment could potentially limit our decision-making options with respect to data processing and storage. Inadequate internal guardrails governing the use of new technologies, such as AI, could lead, for example, to uncontrolled dissemination or independent AI activity that does not comply with applicable legal and ethical standards or corporate objectives. Such developments could potentially necessitate rapid adjustments to our operating processes or IT system landscape, give rise to financial consequences, damage our reputation, result in a loss of trust among stakeholders, and jeopardize our operational stability. To counter these risks, we evaluate and utilize forward-looking approaches. Processes and measures have also been implemented to keep technical security precautions up to date and proactively identify and examine new threats. In addition, security measures implemented by the Corporate Cyber Defense Center protect our IT infrastructure against unauthorized access.
Finance and tax (Medium: Group)
In the section below, we report on the financial opportunities and risks that are relevant for the Bayer Group and, where applicable, fall within the scope of the provisions of IFRS 7, irrespective of whether they are required to be reported as part of our ERM system.
Liquidity risk
Liquidity risks are defined as the possible inability of the Bayer Group to meet current or future payment obligations. These include aspects such as uncertainties regarding future cash flows, as well as difficulties in refinancing existing debts, and require strategies to ensure sufficient liquidity. Due to ongoing legal proceedings, there may be an unplanned increase in liquidity requirements for the Bayer Group, including at short notice.
Liquidity risks are determined and managed on a centralized basis by the Treasury & M&A Enabling Function as part of our same-day and medium-term liquidity planning. We hold sufficient liquidity to ensure the fulfillment of all planned payment obligations throughout the Bayer Group at maturity. Furthermore, a reserve is maintained for unbudgeted shortfalls in cash receipts or unexpected disbursements, and its balance is regularly reviewed and adjusted. Undrawn credit facilities also exist with banks, including, in particular, a €5 billion syndicated revolving credit facility with a tenor that currently runs until December 2030 plus a one-year extension option, as well as two additional credit facilities with a total volume of €1.5 billion and a tenor that runs until August 2026.
Credit risks
Credit risks arise from the possibility that the value of receivables or other financial assets of the Bayer Group may be impaired because counterparties cannot meet their payment or other performance obligations. The maximum default risk is reduced by existing collateral, especially our global credit insurance programs. To manage credit risks from trade receivables, each customer is appointed a credit manager who regularly analyzes the customer’s creditworthiness. Credit limits are set for all customers. We generally agree reservation of title with our customers. Credit risks from financial transactions are managed centrally in the Treasury & M&A Enabling Function. To minimize risks, financial transactions are only conducted within predefined exposure limits and with banks and other partners that preferably have investment grade ratings.
Opportunities and risks resulting from market price changes
Opportunities and risks resulting from fluctuations in currency exchange rates, interest rates and commodity prices are managed by the Treasury & M&A Enabling Function. Risks are mitigated through the use of derivative financial instruments. The type and level of currency, interest-rate and commodity-price risks are determined using sensitivity analyses as per IFRS 7 that are based on hypothetical changes in risk variables (such as interest curves) to gauge the potential effects of market price fluctuations on equity and earnings.
Foreign currency opportunities and risks for our company arise from changes in exchange rates and the related changes in the value of financial instruments (including receivables and payables) and of anticipated payment receipts and disbursements not in the functional currency. Receivables and payables in liquid currencies from operating activities and financial items are generally fully exchange-hedged through cross-currency interest-rate swaps and forward exchange contracts. Anticipated exposure from planned payment receipts and disbursements in the future is hedged through forward exchange contracts and currency options according to management guidelines. Sensitivities were determined on the basis of a hypothetical scenario in which the euro appreciates or depreciates by 10% against all other currencies compared with the year-end exchange rates. In this scenario, the estimated hypothetical increase or decrease in cash flows from derivative and nonderivative financial instruments would have improved or diminished earnings as of December 31, 2025, by €26 million (December 31, 2024: €30 million). Derivatives used to hedge anticipated currency exposure that are designated for hedge accounting would have improved or diminished equity (other comprehensive income) by €391 million (December 31, 2024: €428 million). Of this amount, €110 million is related to the Brazilian real (BRL), €106 million to the Chinese renminbi (CNY), €39 million to the Canadian dollar (CAD) and €32 million to the Japanese yen (JPY). Currency effects on anticipated exposure are not taken into account.
Interest-rate opportunities and risks for our company arise from changes in capital market interest rates, which could in turn lead to changes in the fair value of fixed-rate financial instruments and changes in interest payments in the case of floating-rate instruments. Interest-rate swaps are concluded to achieve the target structure for Bayer Group debt. A sensitivity analysis conducted on the basis of our net floating-rate receivables and payables position at the end of 2025 gave the following result: A hypothetical increase of one percentage point in these interest rates (assuming constant currency exchange rates) as of January 1, 2025, would have raised our interest expense for the year ended December 31, 2025, by €3 million (December 31, 2024: €1 million).
Commodity-price opportunities and risks arise from the volatility of raw material prices, which could lead to an increase in the prices we pay for seeds and energy. We reduce commodity-price risks by using commodity-price derivatives such as futures, which are mainly designated as hedge accounting. A sensitivity analysis with a hypothetical 10% change in commodity prices for derivatives used for hedging purposes indicated an effect of €50 million on equity (December 31, 2024: €53 million).
In addition, Bayer has had a long-term structured renewable energy credit (REC) purchase agreement in place in the United States since 2023. The agreement is set to allow the company to secure 40% of its global and 60% of its US-purchased electricity demand out of renewable sources. Full capacity is expected to be reached during 2028, subject to some uncertainties. The agreement contains a contract for difference that is separately accounted for as a derivative at fair value through profit or loss, with the fair value mainly affected by future energy prices. A hypothetical 10% change in energy prices would have resulted in a gain of €50 million or a loss of €52 million, respectively, through profit or loss (December 31, 2024: gain of €55 million or a loss of €56 million).
Financial risks associated with pension obligations
The Bayer Group has obligations toward current and former employees relating to pensions and other post-employment benefits. Changes in relevant measurement parameters such as interest rates, mortality and salary increase rates may raise the present value of our pension obligations. This may lead to increased costs for pension plans or diminish equity due to actuarial losses being recognized in other comprehensive income in the statement of comprehensive income. A large proportion of our pension and other post-employment benefit obligations is covered by plan assets, including fixed-income securities, shares, real estate and other investments. Declining or even negative returns on these investments may adversely affect the future fair value of plan assets. Both of these effects may negatively impact the development of equity and/or earnings, and/or may necessitate additional payments by our company. We mainly address the risk of market-related fluctuations in the fair value of our plan assets by employing a balanced strategic asset allocation and by constantly monitoring investment risks in regard to our global pension obligations.
Tax risks
Bayer AG and its subsidiaries operate worldwide and are thus subject to many different national tax laws and regulations. The companies are regularly audited by the tax authorities in the various countries where they are tax residents. Amendments to tax laws and regulations, legal judgments and their interpretation by the tax authorities, and the findings of tax audits in these countries may result in higher tax expense and payments, thus also influencing the level of tax receivables, tax liabilities and deferred tax assets and liabilities. Significant acquisitions, divestments, restructuring programs and other reorganizational measures that we undertake could also have a negative impact on such items. We counter the resulting risks by continuously identifying and evaluating the tax framework. We establish provisions for taxes, based on estimates, for liabilities to the tax authorities of the respective countries that are uncertain as to their amount and probability of occurrence.
Major programs (Medium: Group)
Throughout the organization, we are implementing Dynamic Shared Ownership (DSO), our new operating model that is aimed at significantly enhancing the Bayer Group’s focus on our mission, accelerating the pace of innovation and more effectively harnessing our growth potential. In this connection, we face the challenge of ensuring that we can adequately leverage the benefits we expect to arise from this transformation. Please see the “Group strategy” section of Chapter A 1.2.1 Strategy and Targets for details. In addition, our ambitious objectives to standardize IT processes and systems may take longer to implement than planned or may not be completely fulfilled. Materialization of these risks could result in consequences such as increased costs and/or disruptions to service continuity. We counter these risks by deploying dedicated teams and multipliers to drive forward these projects with the Board of Management’s full backing.
Across our businesses, the implementation of the DSO operating model represents an opportunity as it enables us to enhance engagement and achieve swifter market launches for globally leading innovations. This is based on reducing hierarchical layers, cutting bureaucracy and empowering teams to independently make decisions that closely align with customer needs, as well as on the roll-out of new holistic talent management and skills-based career development programs, for example. By adopting a talent-centric approach and enabling staff to work in independent, empowered teams, we can strengthen our employer brand through increased employee satisfaction and improved performance throughout the entire Group.
External partner compliance (Medium: Group)
There is a risk that our partners, such as suppliers, do not pay due attention to our corporate values and applicable laws, as well as requirements concerning ethics, compliance – including respect for human rights – and sustainability. Besides an adverse impact for rights-holders from a potential human rights violation as defined by the International Bill of Human Rights and the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, as well as the financial consequences for Bayer, a materialization of those risks could also negatively impact our reputation and cause a supply interruption. To address these risks, we have clear sustainability criteria and standards in place for our supply chain on both a global and regional level. With the goal of improving sustainable practices in our supply chain, we operate a Group-wide, four-step management process that comprises the following elements: raising awareness, supplier selection, supplier evaluation and supplier development.
Health, safety and environment (Medium: Group, Crop Science)
We attach great importance not only to product safety but also to protecting our employees and the environment, as well as to respecting human rights both within our own business operations and also in our business relationships along the value chain. Seed production is especially susceptible to human rights violations, such as with regard to working conditions and child labor. We address these challenges by implementing a dedicated human rights management process for seed production. Misconduct or noncompliance with legal requirements or Bayer Group standards may result in personal injury, damage to property, reputation or the environment, loss of production, business interruptions and/or liability for compensation payments. Additional ramifications may also include the obligation to remediate contamination, particularly soil or groundwater contamination, or redress for human rights violations, as well as sanctions due to the potential failure to adequately address human rights risks. We have put in place principles, standards and measures aimed at ensuring that our requirements are adequately communicated and optimally implemented.
Intellectual property (Medium: Crop Science, Pharmaceuticals)
Our portfolio largely consists of patent-protected products. Generic manufacturers in particular attempt to contest or circumvent patents prior to their expiration. We are currently involved in legal proceedings to enforce patent protection for our products. Conversely, legal action by third parties for alleged infringement of patent or other property rights by our company may impede or even halt the development or manufacturing of certain products. We may also be required to pay monetary damages or royalties to third parties. Our patents department regularly reviews the patent situation in collaboration with the respective operating units and monitors for potential patent infringements so that legal action can be taken if necessary.
Legal/compliance (Group)
We are exposed to risks from legal disputes or proceedings to which we are currently a party or which could arise in the future. See Note [30] to the Consolidated Financial Statements of the Bayer Group under “Legal risks.” The legal risks described are those to which Bayer AG is exposed either directly or through subsidiaries. The legal proceedings outlined there are those currently considered to involve material risks and do not represent an exhaustive list. The general risks to which we are currently and/or potentially exposed include, but are not limited to, those in the areas of product liability, securities law, breach of contract, competition and antitrust law, anti-corruption law, patent law, tax law, data privacy, environmental protection and human rights. Investigations into possible legal or regulatory violations may result in the imposition of civil or criminal penalties – including substantial monetary fines – and/or other adverse financial consequences. Payments may also need to be made under out-of-court settlements or adverse court decisions. The materialization of any of these risks may harm our reputation and hamper our commercial success. We have established a global compliance management system to ensure the observance of laws and regulations.
Glyphosate matter
A large number of lawsuits from plaintiffs claiming to have been exposed to glyphosate-based products manufactured by Bayer’s subsidiary Monsanto Company (“Monsanto”) have been served upon Monsanto in the United States. Glyphosate is the active ingredient contained in a number of Monsanto’s herbicides, including Roundup™-branded products. Plaintiffs allege personal injuries resulting from exposure to those products, including non-Hodgkin lymphoma (“NHL”) and multiple myeloma, and are seeking compensatory and punitive damages. The plaintiffs are claiming, inter alia, that the glyphosate-based herbicide products are defective and that Monsanto knew, or should have known, of the risks allegedly associated with such products and failed to adequately warn its users. Additional lawsuits are anticipated. The majority of plaintiffs have brought actions in state courts in Missouri.
In February 2026, Monsanto reached agreement on two significant settlements regarding Roundup™ claims: a proposed US nationwide class settlement and a separate agreement settling certain other Roundup™ claims on mutually acceptable terms. The settlement agreements do not contain any admission of liability or wrongdoing. They are aimed at significantly containing the Roundup™ litigation.
The proposed class settlement is designed to resolve current and future glyphosate-related claims alleging NHL injuries regardless of legal theory through a long-term claims program.
The scope of the proposed settlement class covers persons who allege exposure to Roundup™ prior to the settlement date and have a medical diagnosis of NHL or receive a medical diagnosis of NHL before the end of a 16-year period following the effective date of the settlement, which occurs after final trial court approval of the class settlement agreement and exhaustion of all appellate rights.
To fund the class, Monsanto will make declining capped annual payments for up to 21 years totaling up to US$7.25 billion.
The class settlement agreement is subject to court approval. As part of the approval process, a settlement administrator will send notice to the class, and class members will have the opportunity to object to or opt out of the settlement. Monsanto has the right to terminate the class settlement if the number of opt-outs is excessive.
If the state trial court finally approves the class settlement, such order could be appealed, with the decision on an appeal potentially taking several years. The class settlement does not become final and effective until all appeal procedures have been concluded.
The following summarizes other Roundup™ litigation developments in the United States which are not affected by the two settlements reached by Monsanto in February 2026.
As of February 2026, 28 Roundup™ trials have been concluded before both federal and state courts in California, Missouri, Oregon, Arkansas, Delaware, Illinois, Georgia and Pennsylvania. In one of these cases, a defense verdict was reversed upon appeal and a re-trial was scheduled. Another seven of these cases remain pending on appeal, including only three outstanding adverse verdicts: Anderson, Dennis and Durnell.
In 2025, four plaintiffs’ verdicts (Caranci, Martel, Anderson and Dennis) were affirmed by appellate courts without further reduction of the amounts awarded at the trial court level. In August and November 2025, Monsanto agreed, without admission of liability, to settle the Martel and Caranci cases on mutually acceptable terms. In May 2025, the plaintiffs’ verdict (comprised of approximately US$61 million in compensatory damages and approximately US$550 million in punitive damages) in Anderson, a three-plaintiff case tried in Missouri, was upheld by the appellate court. Monsanto intends to seek review by the US Supreme Court. In November 2025, the California appeals court upheld a judgment of approximately US$28 million against Monsanto in the Dennis case. Monsanto is currently seeking review by the California Supreme Court.
In 2024, the Third Circuit Federal Court of Appeals issued its ruling in Schaffner, unanimously holding that the state-based failure-to-warn claims in this case are expressly preempted by the Federal Insecticide Fungicide and Rodenticide Act (FIFRA). This decision on federal preemption has created a circuit split with prior decisions of the Ninth (Hardeman) and Eleventh (Carson) Circuits. In April 2025, Monsanto filed a petition for a writ of certiorari with the US Supreme Court in the Durnell case, shortly after the Missouri Supreme Court denied Monsanto’s appeal. In its petition, Monsanto argues that the split among federal circuit courts in the Roundup™ personal injury litigation, on the cross-cutting question of whether federal law preempts state-based failure-to-warn claims, warrants review and resolution. In June 2025, the US Supreme Court asked the Solicitor General to provide the Federal Government’s view on whether the Court should hear the Durnell appeal. In December 2025, the Solicitor General filed its brief supporting the review of the petition for a writ of certiorari in the Durnell case by the US Supreme Court. In January 2026, the US Supreme Court announced that it will review the Durnell case. The US Supreme Court case is unaffected by the settlements agreed in February 2026 described above.
As of December 31, 2025, Bayer’s provision and liabilities for the glyphosate litigation totaled US$11.3 billion (€9.6 billion). Bayer continues to believe there is no reason for safety concerns in connection with the products mentioned above.
Additionally, as of February 15, 2026, a total of approximately 35 lawsuits (proposed class actions and individual actions) relating to Roundup™ have been filed against Bayer in Canada. The lead class action was partially certified and will proceed on the merits.
Bayer believes it has meritorious defenses and intends to defend the safety of glyphosate and our glyphosate-based formulations vigorously.
PCB matters
Bayer’s subsidiary Monsanto has been named in lawsuits brought by various governmental entities in the United States claiming that Monsanto, Pharmacia and Solutia, collectively as a manufacturer of PCBs, should be responsible for a variety of damages due to PCBs in the environment, including bodies of water, regardless of how PCBs came to be located there. PCBs are chemicals that were widely used for various purposes until the manufacture of PCBs was prohibited by the EPA in the United States in 1979.
In 2020, Bayer entered into a class settlement, valued at approximately US$650 million, to settle claims of approximately 2,500 municipal entities. In 2022, the court issued its final approval of the class settlement. There were approximately 84 opt-outs from the class settlement, the majority of which have now filed lawsuits. In 2024, Bayer agreed, without admission of liability, to pay US$160 million to settle the lawsuit with the City of Seattle, US$35 million of which was devoted to PCB remediation. In the same year, Bayer agreed, without admission of liability, to pay US$35 million to settle the lawsuit with the City of Los Angeles.
In 2024, the Maine Attorney General filed suit in state court alleging claims for damages related to PCB contamination of the state’s environment, meaning there are now five attorney general cases pending: Delaware, Maine, Maryland, New Jersey and Vermont. Prior cases filed or threatened by Washington, Washington D.C., New Mexico, New Hampshire, Ohio, Pennsylvania and Virginia were settled for a combined total of approximately US$456 million. In December 2025, the cases filed or threatened by West Virginia and Illinois were settled on mutually acceptable terms. The company also settled a pending matter with the State of Oregon for US$698 million, reflecting unique circumstances in that State.
The Vermont Attorney General case is different from the others in scope because it involves allegations of contamination not only of the state’s environment but also of its school buildings. There is a similar complaint (Addison Central School District) pending in federal court (District of Vermont) by private lawyers representing 93 Vermont school districts alleging PCB contamination in school buildings. In addition, there is a pending case in Vermont on behalf of the Burlington School District and related personal injury claims (see below).
Monsanto also faces numerous lawsuits claiming personal injury due to use of and exposure to PCB products in school and university buildings. One group of cases with approximately 250 plaintiffs claimed a wide variety of personal injuries allegedly due to PCBs in the building products of the school Sky Valley Education Center (“SVEC”) in King County, Washington. As of January 31, 2026, 10 trials had been completed in these matters, involving a total of 80 plaintiffs. 31 of these plaintiffs were not successful as the juries decided in favor of Monsanto or a mistrial was declared after the jury was unable to reach a decision. The other 49 plaintiffs were awarded a total of approximately US$320 million in compensatory and a multiple thereof in punitive damages. The undisputed evidence in these cases does not, in Bayer’s opinion, support the conclusions that plaintiffs were exposed to unsafe levels of PCBs or that any exposure could have caused their claimed injuries. Bayer had filed post-trial motions or appealed the adverse verdicts, due to numerous significant trial errors. In June 2025, due to the specific circumstances and without admission of liability, Monsanto agreed to settle the claims of 22 plaintiffs in the Burke case on mutually acceptable terms. In August 2025, Monsanto reached an agreement in principle, without admission of liability, to settle on mutually acceptable terms all existing SVEC cases, involving more than 200 plaintiffs, except for current adverse SVEC verdicts that remained on appeal. In December 2025, Monsanto fully resolved the majority of these claims. In 2024, the Washington Court of Appeals vacated the first SVEC verdict (Erickson et al.) of US$185 million (compensatory damages of approximately US$50 million and punitive damages of approximately US$135 million), based on multiple trial errors. In October 2025, the Washington Supreme Court reversed the appellate court’s decision and reinstated the jury’s verdict. In December 2025, without admission of liability, Monsanto agreed to settle the Erickson case on mutually acceptable terms. In January 2026, Monsanto agreed, without admission of liability, to settle the eight remaining adverse SVEC verdicts, on mutually acceptable terms.
In October 2025, a lawsuit was filed in North Carolina by NC State University seeking damages from Monsanto related to alleged PCB contamination of a building called Poe Hall (e.g., remediation costs, demolition, replacement construction). NC State University also seeks indemnification and declaratory relief, allocating responsibility to Monsanto for potential workers’ compensation claims by university employees and potential exposure claims by university students. In February 2026, a lawsuit was filed by 12 former NC State University students and employees against Monsanto claiming they had developed breast cancer and other conditions due to alleged PCB exposure at Poe Hall. These plaintiffs are seeking compensatory and punitive damages.
In 2023, a putative class action lawsuit (Neddo) was filed in the District of Vermont by a mother on behalf of her three children who attended local schools. She alleges that her children are at increased risk of cancer and non-cancer health issues from PCB exposure and seeks the cost of medical monitoring. The complaint, which was amended in 2025, identifies 46 allegedly contaminated schools, and the proposed class is defined as all individuals who attended or worked at one of the contaminated schools. There are also two pending personal injury cases involving a small number of plaintiffs related to Burlington High School and Twin Valley Elementary School.
There are additional personal injury cases stemming from non-school PCB exposure. Nine cases are pending in Massachusetts state court involving 14 plaintiffs who allege various personal injuries from alleged exposure to PCBs in or near a former General Electric landfill. A personal injury and wrongful death lawsuit involving 169 current or former employees at Clark County Government Center is pending in Nevada. These plaintiffs allege that PCBs contaminated the Center through prior operations by Union Pacific Railroad at the site. The Nevada action was dismissed by the state court, and the plaintiffs appealed. In 2024, the Nevada Supreme Court reversed the dismissal. Lastly, there are three cases involving five plaintiffs claiming injury due to exposure to PCBs near Monsanto’s former Krummrich plant.
We believe that we also have meritorious defenses in these matters and intend to defend ourselves vigorously.
To recover costs associated with the PCB-related litigation, Bayer filed a complaint in 2022 in the Circuit Court of St. Louis County for the State of Missouri to enforce its rights under certain indemnity contracts. Under these contracts, the companies who purchased PCBs for use in their products agreed to indemnify Monsanto for PCB-related litigation costs, including settlements.
We may incur considerable financial disadvantages from pending lawsuits and/or potential future cases if, for example, we are ordered to pay compensatory and possibly punitive damages or if we assume payment obligations under out-of-court settlements. We could be compelled to cover any such increased financial requirements by issuing additional external debt, increasing our equity capital or divesting assets – possibly on unfavorable terms – or through combinations of these measures. The terms on which we obtain external financing could become less favorable as a result of any increased financial requirements. The materialization of any of these risks may also adversely affect our reputation and our commercial success.
Product safety and stewardship (Medium: Crop Science, Pharmaceuticals)
Despite extensive studies prior to approval or registration, products may be partially or completely withdrawn from the market due, for example, to the occurrence of unexpected side effects or negative effects of our products. Such a withdrawal may be voluntary or result from legal or regulatory measures. In the agriculture business in particular, there is an additional risk that our customers could use our products incorrectly. Furthermore, the presence of traces of unwanted genetically modified organisms in agricultural products and/or foodstuffs may have wide-ranging negative repercussions. The materialization of any of these risks could, for example, lead to a loss of sales and earnings, a negative impact on our reputation and potential liability claims. We counter such risks by taking comprehensive measures in the areas of pharmaceutical and crop protection product safety and testing, including, in particular, a comprehensive stewardship program for genetic product integrity and quality with regard to seeds. These measures are based on globally defined principles and include analysis and monitoring measures, an alert system and training programs.
Quality and regulatory requirements (Medium: Group, Crop Science, Pharmaceuticals)
In almost every country in which we operate, our business activities are subject to extensive regulations, standards, requirements and inspections that also apply to our local contract manufacturers. In the area of health, this largely pertains to clinical studies and manufacturing processes, but also to production materials, for example. At our Crop Science Division, extensive requirements apply along the value chain, such as in our production activities, and also with respect to the external partners involved. Acquisitions may at times also be subject to requirements, compliance with which must be ensured both during and after the integration process. Potential infringements of regulatory requirements may result in the imposition of civil or criminal penalties, including substantial monetary fines, restrictions on our freedom to operate, and/or other adverse financial consequences. They could also harm our reputation and lead to declining sales and/or margins. We counter these risks through binding principles, standards and the control mechanisms in place. Quality requirements are defined and implemented within global quality management systems.
Security (Medium: Group)
Potential criminal activities targeting our employees, property or business activities represent a risk for our company. These include intellectual property theft, violent crime, fraud and sabotage. Counterfeit versions of our products being potentially put into circulation may pose a risk to our reputation and financial interests, but most of all to the health of those concerned. In addition, we could be exposed to crisis situations, such as pandemics, that may disrupt our infrastructure and production processes. To mitigate these risks, we utilize early warning systems for threat detection and prevention. Our global security and crisis management team conducts regular crisis simulations and assists local organizations in developing response plans. Established reporting channels ensure timely reporting of security incidents.
1 The classification pertains to the risks.