(Reuters) -3M said on Tuesday it had agreed to pay $6 billion to settle nearly 260,000 lawsuits accusing it of selling defective combat earplugs that caused hearing loss in hundreds of thousands of current and former U.S. military service members.
“This agreement is not an admission of liability,” 3M said in a statement on Tuesday, adding it was prepared to continue to defend itself in the litigation if certain agreed terms of the agreement were not fulfilled.
The deal comes after a failed attempt by 3M earlier this year to move the lawsuits, which had grown into the largest mass tort litigation in U.S. history, into bankruptcy court in the hope of limiting its liability.
The Combat Arms earplugs were made by Aearo Technologies, a company 3M acquired in 2008. They were used by the U.S. military in training and combat from 2003 to 2015, including in Afghanistan and Iraq.
Aearo filed for bankruptcy in July 2022, with 3M pledging $1 billion to fund its liabilities stemming from the earplug lawsuits.
However, a U.S. judge dismissed the bankruptcy of 3M’s subsidiary Aearo Technologies in June, ruling that Aearo as a well-supported subsidiary of 3M enjoys a “greater degree of financial security than warrants bankruptcy protection.”
Shares of 3M were up about 1% at $105.20 in premarket trading on Tuesday.
According to Tuesday’s agreement, 3M will contribute a total amount of $6 billion between 2023 and 2029, with $5 billion in cash and $1 billion in common stock, the company said.
The latest settlement comes just months after 3M announced a tentative $10.3 billion deal with a host of U.S. public water systems to resolve claims of water pollution by per- and polyfluoroalkyl substances, or PFAS, known as “forever chemicals.”
The industrial giant said it will record a pre-tax charge of about $4.2 billion in the third quarter of 2023 related to the settlement.
(Reporting by Kannaki Deka in Bengaluru; Editing by Shinjini Ganguli)
