The Stock of 3M Rallies After It Was Offered a $10.3 Billion ‘Forever Chemical’ Settlement

In the extended session on Thursday, shares of 3M Co. experienced a rally following the company's announcement that it would pay $10.3 billion to settle claims related to the presence of "forever chemicals" in drinking water.

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The term "forever chemicals" refers to per- and polyfluoroalkyl substances (PFAS), a group of synthetic chemicals known for their persistence in the environment and suspected links to significant health effects.

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3M shares (MMM) demonstrated a notable increase of 3.6%, leading the premarket gainers in the Dow Jones Industrial Average.

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The settlement payment will result in a charge during the second quarter. Over the course of 13 years, the payments aim to support efforts to detect and remove PFAS from public water supplies, as well as resolve existing and future claims related to drinking water, as stated by 3M.

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In its official statement, 3M emphasized that this agreement should not be interpreted as an admission of liability. The company affirmed its readiness to continue defending itself in litigation if the court does not approve the agreement or if certain agreed-upon terms are not fulfilled.

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Previously, in late May, 3M's stock hit a 10-year low following Dutch officials holding the company responsible for PFAS damage caused by a factory in Western Scheldt.

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Year to date, 3M shares have declined by 16.3% as of Thursday, while the Dow has experienced a gain of 2.4%.

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