3M said to be in at least $10 billion PFAS pollution deal (1)

3M Co. has reached a tentative settlement of at least $10 billion on water pollution claims related to chemicals for life, according to people familiar with the proposed settlement, the largest PFAS settlement in the United States and one of the largest malpractice settlements mass ever.

3M, the no. 1 of per- and polyfluoroalkyl substances, is considering settlement to start its first federal trial of the waterproofing agent, which begins June 5 in Charleston, South Carolina, said the People, who asked not to be called to discuss the matter because it is private. The Charleston judge is overseeing the consolidation of approximately 4,000 PFAS-related lawsuits.

Shares of the company jumped as much as 11% on the news, with trading volume more than double the daily average. Shares were down 21% this year through Thursday’s close.

But even amid the stock’s surge, 3M still faces a daunting upswing. Its overall potential PFAS liability stands at $143 billion, far more than double its $56 billion market capitalization on cleanup alone, according to estimates by financial research firm CreditSights.

More is needed

Our take: We’re thrilled that 3M appears to be making progress, but more needs to be done before we think we’ll see a real clearing event for the name. Sanford C. Bernstein & Co. analysts wrote in a note Friday. We also highlight the ratio of at least $10 billion in liquidation and believe the final liquidation will eventually be significantly higher.

To know more: 3M Goes to Trial in $143 Billion PFAS Existential Litigation

The deal, which would require approval from 3M’s board, would only affect municipal suppliers of drinking water for consumers, the people said. It would not cover state attorneys general lawsuits for river and stream pollution, federal government charges, personal injury and property damage claims, or class action suits, they said.

We do not comment on rumors or speculation, 3M spokesman Sean Lynch said in a statement.

DuPont big deal

Researchers have found that PFAS, an industrial product used since the 1950s in products ranging from computer chips and nonstick pans to cosmetics, never decomposes naturally and must be removed from waterways to landfills or destroyed. from combustion or with emerging technologies. The US Environmental Protection Agency says PFAS are linked to developmental delays in children and increased cancer risks, and some researchers have linked them to specific cancers.

3M disputes these conclusions and argues that PFAS do not pose a significant threat to public health and well-being.

The potential deal would come on the heels of a $1.185 billion PFAS deal announced by Friday Chemour Co., DuPont de Nemours Inc. and the DuPont spin-off Corteva Inc. for the pollution claims related to DuPont’s manufacture of the compounds.

To know more: DuPont, Chemours, Corteva to pay $1.19 billion in PFAS deal

The two agreements are part of a much larger potential liability facing PFAS producers. Since 2018, 3M alone has settled nearly $1 billion in PFAS claims in the United States. That sum includes a deal made on the eve of the trial in 2018 in which the St. Paul, Minnesota-based company agreed to pay $850 million to settle the state attorney general’s claims that the chemicals contaminated the drinking water and natural resources. 3M has not admitted to any wrongdoing.

Impact on the stock

Earlier this week 3M, DuPont and other companies agreed to pay more than $100 million to settle a PFAS lawsuit by the city of Rome, Georgia.

To know more: 3M, DuPont to pay $100 million to settle Georgia PFAS lawsuit

Litigation risks have already taken over 3M’s stock. The shares had fallen about 60% from their high in January 2018, partly due to liability issues, wiping out about $100 billion in market value. Some legal experts have warned that 3M could eventually be forced to seek bankruptcy protection to handle the litigation.

If the latest deal goes through, it could help avert such a fate.

The case is Aqueous Film-Forming Foams Products Liability Litigation, 18-mn-2873, US District Court, District of South Carolina (Charleston).

(Adds detail, context, and citations throughout, starting with the first paragraph.)

–With the assistance of Ryan Beene, Pat Rizzuto, Katrina Lewis AND Matt Townsend.

To contact the reporter about this story:
Jeff Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editors responsible for this story:
Antonio Lin at alin364@bloomberg.net

Peter Jeffrey, Angela Luna

2023 Bloomberg LP All rights reserved. Used with permission.

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