3M (MMM) Reaches $10.3B Settlement With PWS Related to PFAS
3M Company MMM has reached an agreement to pay at least $10.3 billion to settle claims with several public water systems (“PWS”) in the United States associated with the presence of the harmful chemical, per- and polyfluoroalkyl substance (PFAS), in drinking water. The company has long been manufacturing this harmful substance, which can cause serious ailments like cancer. Following this news, shares of the company gained 5% in after-market trading on Jun 22.
As part of the settlement, 3M will provide funding of up to $12.5 billion to PWS over a period of 13 years for testing the presence of PFAS and treating it. Upon receiving court approval, the settlement will free MMM from any claims associated with the usage of PFAS in drinking water.
With this agreement, 3M expects to record a pre-tax charge of approximately $10.3 billion in the second quarter of 2023, which will be presented as an adjustment for special items.
3M Company Price
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Among the several lawsuits 3M is facing, this agreement will put to rest a claim by Stuart, FL, which alleged 3M of manufacturing firefighting foams containing PFAS, despite knowing how harmful the chemical was. The city has been seeking more than $100 million from 3M for water filtration and soil remediation.
Nevertheless, the company continues to be embroiled in thousands of other PFAS-related lawsuits.
Amid regulatory pressure to restrict the use of PFAS, in December 2022, 3M announced that it would cease manufacturing PFAS and discontinue its use in products by the end of 2025. The company has already minimized the usage of PFAS over the past three years and aims to continue developing solutions for customers to replace this harmful chemical.
Zacks Rank & Key Picks
3M currently carries a Zacks Rank #3 (Hold).
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