© Reuters
Investing.com — Shares in 3M Co. (NYSE:) climbed in premarket U.S. trading on Monday following media reports that the industrial conglomerate has tentatively agreed to pay over $5.5 billion to resolve hundreds of thousands of lawsuits alleging that its earplugs sold to the U.S. military were defective.
According to the reports, sources close to the matter say that the negotiations are ongoing and a final amount has yet to be decided. The potential settlement was first reported by Bloomberg News.
More than 300,000 current and former service members have filed claims blaming Minnesota-based 3M and one of its subsidiaries for knowingly making earplugs that failed to protect them from hearing loss.
3M has contested the lawsuits, saying the earplugs work correctly when users are given proper training.
The possible settlement amount would be far less than the $10B to $15B figure estimated by some analysts. However, it could still add to 3M’s litigation costs, which are likely to mount further following a separate tentative multi-billion dollar settlement earlier this year to lawsuits over so-called “forever chemicals” in municipal water supplies.
In June, a judge in the U.S. state of Indiana dismissed a bankruptcy filing by the earplugs’ maker Aearo Technologies, which was purchased by 3M in 2008. The decision was seen as a setback for 3M’s legal strategy. The company had become one of several groups, including Johnson & Johnson (NYSE:), to recently attempt to limit its exposure to personal injury claims by having a subsidiary file for Chapter 11 bankruptcy protection.
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