3M's $12.5 billion settlement to address 'forever chemicals' in drinking water receives final court approval

By James Rogers

Payments are scheduled to begin in the third quarter of 2024, according to 3M

3M Co.'s previously announced $12.5 billion settlement agreement with U.S. public water suppliers has received final approval from a U.S. District Court in Charleston, S.C.

Last year 3M (MMM) improved the terms of the proposed settlement of $10.5 billion to $12.5 billion for the company's role in contaminated drinking water with per- and polyfluoroalkyl substances, also known as PFAS or "forever chemicals." The agreement, which is now finalized, will support public water suppliers that detect PFAS at any level or may do so in the future and will benefit U.S.-based public water suppliers that provide drinking water to Americans across the country, according to 3M.

"This is yet another important step forward for 3M as we continue to deliver on our priorities," 3M CEO Mike Roman said in a statement. "The final approval of this settlement and continued progress toward exiting all PFAS manufacturing by the end of 2025 will further our efforts to reduce risk and uncertainty as we move forward."

Related: 3M makes changes to improve terms of settlement of up to $12.5 billion for 'forever chemicals' in drinking water, NY AG says

As previously disclosed, the consumer, industrial and healthcare-products company has recorded an accrual of $10.3 billion related to the settlement, which reflects the pre-tax present value of the expected payments over 13 years. Payments are scheduled to begin in the third quarter of 2024, provided there are no pending appeals of the final approval order. "3M also continues to actively engage in insurance recovery activities," the company said in its statement.

3M has been dealing with other high-profile settlements. Last week the company said that its Combat Arms Earplug litigation is nearing its final resolution, with the company agreeing to pay up to $6 billion to settle all claims.

In a separate announcement Monday, the industrial giant completed the spinoff of its healthcare business. Solventum Corp. (SOLV.WI) is listed on the New York Stock Exchange. "Both companies are positioned to pursue their respective growth and tailored capital allocation plans, and I am excited to see both companies succeed as they innovate new solutions and create value for their respective stakeholders," Roman said in a statement.

Related: 3M to pay $6 billion as Combat Arms Earplug settlement nears final resolution

3M's board approved the spinoff last month. The company has retained 19.9% of the outstanding shares of Solventum's common stock, which will be monetized within five years following the spin-off.

3M shares rose 2.3% in premarket trades Monday. 3M's stock is down 18.9% in 2024, compared with the S&P 500 index's gain of 10.2%.

-James Rogers

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04-01-24 0755ET

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