3M Co MMM confirmed reaching an agreement with the court-appointed negotiating plaintiffs' counsel to resolve the Combat Arms Earplug litigation against it and Aearo Technologies.
Under the agreement, 3M will contribute a total amount of $6.0 billion between 2023 and 2029, with $5 billion in cash and $1 billion in stock.
The agreement is intended to resolve all claims associated with the Combat Arms Earplug products.
The Florida and Minnesota courts are entering orders to support the implementation of the agreement.
The company said the agreement is not an admission of liability and that the products at issue are safe and effective when used properly.
The military service personnel have alleged that they developed hearing loss and tinnitus, a buzzing or hissing sensation in the ears from using 3M's earplugs.
The lawsuits also accused the company of deliberately failing to warn the U.S. government or users despite knowing the earplugs were too short to work optimally.
As a result of the agreement, the company will record a pre-tax charge of approximately $4.2 billion in the third quarter of 2023, representing the $5.3 billion pre-tax present value of contributions under the agreement net of 3M's existing accrual of approximately $1.1 billion related to this matter.
Price Action: MMM shares are trading higher by 0.85% at $105.00 in premarket on the last check Tuesday.
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