3M has reportedly agreed to $5.5 billion settlement with U.S. military

3M Co (NYSE: MMM) has reportedly agreed to a multi-billion settlement with the U.S. military. Its shares opened about 6.0% up on Monday.

3M to pay over $5.5 billion to settle legal claims

The multinational conglomerate has been fighting legal claims that one of its subsidiaries – Aearo Technologies sold dangerously defective combat earplugs to the U.S. military for several years.

But it has now tentatively agreed to pay north of $5.5 billion to resolve that matter, as per Bloomberg News. According to Carl Tobias – Law Professor at the University of Richmond:

Note that Bloomberg Intelligence expected 3M to cough up a much higher $9.5 billion to settle the said lawsuits.

3M refrains from commenting on speculation

Aearo Technologies had filed for Chapter 11 protection in 2021 to limit liability related to these legal claims – an effort that was blocked by a U.S. judge this year in June.

A representative of 3M refrained from commenting on the Bloomberg report on Monday. But Bloomberg Intelligence analysts Michael Doto and Joel Levington wrote:

Last month, 3M reported its financial results for the second quarter that topped Street estimates. Its shares are down about 20% versus its year-to-date high at writing.