3M Stock Fails to Hold Onto Gains After Lawsuits Settlement
Despite the fact that 3M Co (MMM:US) shares opened higher on Friday, they closed 0.3% higher after the company said it will pay as much as $10.3 billion over 13 years to settle claims over “forever chemicals” that it used in the manufacturing process. These chemicals allegedly polluted drinking water supplies across the United States.
The estimated figure is in line with the rumored approximately $10 billion figure that has been reported by media outlets recently. Last year, the industrial giant said it would stop manufacturing products by using these chemicals by the end of 2025.
“This is an important step forward for 3M, which builds on our actions that include our announced exit of PFOA and PFOS manufacturing more than 20 years ago, our more recent investments in state-of-the-art water filtration technology in our chemical manufacturing operations, and our announcement that we will exit all PFAS manufacturing by the end of 2025,” said 3M chairman and CEO Mike Roman, in a statement.
The stock initially reacted positively to the announcement as it will lift legal and financial uncertainty in these settlements. It is likely that investors have preferred to wait for 3M to settle its other large lawsuit, concerning ear plug litigation. The “forever chemicals” lawsuit represents only a portion of 3M’s ongoing legal liabilities.
Earlier this month, a U.S. judge rejected 3M’s request to resolve ear plug lawsuits by sending its subsidiary Aearo Technologies into bankruptcy. The company is facing hundreds of thousands of lawsuits in the U.S. that accuse 3M-produced military earplugs of causing hearing loss for U.S. military members.
Several Congress members have been buying 3M shares in recent months. Most notably, Rep. Ro Khanna spent $15,000 - $50,000 to acquire 3M shares on May 19, when the stock closed at $99.03.
3M shares are down 17.76% year-to-date.
