Monsanto Co said on Friday that it had settled a long-running legal battle with residents of West Virginia who claimed they suffered environmental and health problems tied to pollution from a former Monsanto chemical plant.
St. Louis-based Monsanto, which has shifted from a concentration in the chemical business to agricultural seeds, said it would commit to more than $90 million in clean-up, remediation and medical monitoring to resolve a series of class action lawsuits involving a plant once located in Nitro, West Virginia.
The settlement will result in a one-time charge to 2012 earnings of about 5 cents a share, the company said. Analysts were expecting the company to earn $3.50 a share.
An initial fund of $21 million will be established for the medical testing, with up to $63 million in additional funding available.
Monsanto also agreed to pay an undisclosed amount of legal fees owed the plaintiffs' attorneys for the seven-year court battle.
Monsanto said it welcomed the settlement so that it could maintain its focus on the global agricultural seeds business.
"These settlements ensure that both individual and community concerns are addressed, and services are made available for the people of Nitro," said Monsanto Vice President Scott Partridge.
Monsanto operated the Nitro, West Virginia, chemical plant from 1934 to 2000. The plant was used to manufacture the herbicide -- 2,4,5- trichlorophenoxyacacidic acid ("2,4,5-T") -- a compound used in "Agent Orange," which was used in the Vietnam War.
Nitro residents who sued Monsanto alleged the company disposed of dangerous dioxin waste by burning the materials in open pits. They said the dioxin also contaminated soils.
The company had tried to argue that it was working as a government contractor and therefore protected from certain claims related to its waste disposal at that facility. But a judge dismissed that argument earlier this year.
(Reporting by Carey Gillam; Editing by Lisa Shumaker)