Shares of 3M Company (NYSE: MMM) surged 5% in after-hours trading on Thursday. The company has agreed to a significant settlement in a class action lawsuit, but investors remain optimistic about 3M’s ability to overcome this controversy.
The lawsuit involved multiple public water suppliers across the country seeking compensation for the potential cleanup of per- and polyfluoroalkyl substances (PFAS) contamination. The proposed settlement aims to allocate funds for these water suppliers to install PFAS treatment technologies, addressing existing issues and preparing for potential future detections. Over the next 13 years, 3M will contribute a total present value of $10.3 billion towards this endeavor.
This news was widely expected, as reports in June hinted at a settlement within the range of the actual financial amount. Initial speculation caused an 8% increase in the stock price, but investors appear to be even more satisfied with the actual terms of the deal.
It’s important to note that the settlement is still pending court approval. However, 3M remains hopeful about moving forward and has committed to ceasing all PFAS chemical manufacturing by the end of 2025.
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