3M surges on report of $5.5 billion earplug settlement with US Military

3M has reportedly reached a tentative agreement to pay $5.5 billion to settle a series of lawsuits linked to allegedly faulty earplugs it sold to the U.S. military.

Aug 28, 2023 - 18:30

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3M surges on report of $5.5 billion earplug settlement with US Military

Updated at 8:12 am EDT

3M Co. (MMM) - Get Free Report moved firmly higher in pre-market trading following a report that suggests the industrial group will pay a $5.5 billion settlement to resolve legal claims linked to earplugs sold to the U.S. military.

Bloomberg reported that the tentative agreement, which would settle around 300,000 separate suits, had been reached over the weekend. The amount, pegged at $5.5 billion, would be around half of the estimated $10 billion 3M was expected to pay for the allegedly defective plugs.

The earplugs themselves were made by Aearo, a 3M unit that filed for Chapter 11 bankruptcy protection last year in an effort to limit the financial liability tied to the earplugs.

Earlier this spring, 3M also agreed to pay around $10.3 billion to a host of public water companies over the next ten years in order to settle suits linked to the use of per- and polyfluoroalkyl substances, also known as PFAs and often referred to as 'forever chemicals'. Payments could rise to as much as $12.5 billion, 3M said, depending on the levels of PFAs found in public water systems.

3M has pledged to stop making PFAs by 2025.

3M shares, a Dow component, were marked 6.2% higher in pre-market trading to indicate an opening bell price of $105.09 each, a move that would trim the stock's year-to-date decline to around 12.4%.