3M (NYSE:MMM) said it has reached a settlement to resolve personal injury claims in the aqueous film-forming foam, or AFFF, multidistrict litigation pending in federal court in South Carolina, marking what management described as a significant step in addressing its legacy PFAS-related litigation.
The agreement carries a total nominal value of $7.35 billion, to be paid over nine years. The company expects to record a pre-tax charge of $5.8 billion, representing the present value of the future payments. The charge will be treated as a special item and excluded from 3M’s non-GAAP results.
Management said the settlement does not change the company’s full-year 2026 financial guidance or the 2027 framework it previously provided.
Settlement Covers Most Current Personal-Injury Plaintiffs
Chairman and Chief Executive Officer Bill Brown said the agreement addresses one of three major active areas in 3M’s PFAS litigation docket, alongside public water supplier claims and state attorneys general cases. The company reached a public water supplier settlement in 2023 and previously settled with New Jersey, an agreement approved by a court earlier this year.
“This settlement represents a significant milestone in addressing the personal injury litigation, and more broadly, another significant step forward in managing 3M’s legacy PFAS matters,” Brown said.
Following a court-ordered process to vet claims, 3M estimates that approximately 115,000 to 120,000 plaintiffs will be eligible to participate in the settlement, including plaintiffs within and outside the multidistrict litigation. About 40,000 claims were dismissed without prejudice during the vetting process, according to Chief Legal Affairs Officer Kevin Rhodes.
The eligible claims include all six health endpoints that have been the focus of the litigation. Participating plaintiffs will provide broad releases of their claims and potential claims against 3M.
Payment Terms and Participation Requirements
Rhodes said the agreement is designed to encourage broad participation through plaintiff participation thresholds. Certain settlement payments will be triggered once those thresholds are reached, including one threshold for all eligible plaintiffs and another for certain higher-risk claim types.
Approximately $6.27 billion of the overall settlement amount is scheduled to be paid annually from 2028 through 2033 after the participation thresholds are met. If participation falls below the required levels, 3M has the right to withdraw from the agreement, although Rhodes said the company does not expect that outcome.
The agreement also includes:
- Two payments of $125 million each in 2029 and 2030 if participation reaches higher levels.
- Two potential payments of up to $50 million each in 2031 and 2032, contingent on the future docket.
- A $680 million reserve fund that will not be fully paid until 2034.
Specific participation thresholds are confidential and are contained in a sealed exhibit, Rhodes said. He added that the settlement is supported by the Plaintiffs’ Executive Committee and the MDL court. The parties expect that, within about a year, the settlement administrator will be able to calculate participation rates.
Cash Flow and Capital Allocation
Chief Financial Officer Anurag Maheshwari said payments will begin with $50 million in 2026, followed by no payment in 2027. The remaining payments will be spread from 2028 through 2034, with roughly 20% of the total scheduled for 2033 and 2034.
Maheshwari said the company structured the payment schedule to align with its other known obligations, including public water supplier, Combat Arms and New Jersey settlement payments. Combined cash payments related to those obligations and the personal-injury settlement are expected to decline each year from 2027 through 2034.
He said 3M expects to generate $4.8 billion in free cash flow in 2026 after funding more than $2 billion of research and development and capital expenditures. The company also cited more than $5 billion of cash on hand, its 15% stake in Solventum, potential insurance recoveries and access to capital markets as sources of financial flexibility.
Settlement payments are expected to be tax-deductible as they are made, consistent with prior settlements, Maheshwari said. The disclosed $5.8 billion charge is presented on a pre-tax basis and does not include anticipated tax benefits.
Future Litigation Remains
While the personal-injury agreement reduces a major area of exposure, 3M said it will continue to manage state attorney general cases, opt-out claims from the public water supplier settlement, international matters and regulatory and customer-related cases.
Rhodes said the court order anticipated in connection with the settlement would stay personal-injury cases against 3M in the MDL and defer further proceedings while implementation efforts are underway. The order is also expected to establish evidentiary and timing requirements for plaintiffs who do not settle and for future MDL plaintiffs.
Brown said the resolution is intended to let the company devote greater attention to its operating priorities, while continuing to manage the remaining PFAS matters on their individual timelines.
About 3M (NYSE:MMM)
3M is a diversified technology and manufacturing company headquartered in St. Paul, Minnesota. Founded in 1902 as Minnesota Mining and Manufacturing Company, it developed from a mining venture into a global enterprise known for applying materials science and engineering to a broad range of industrial, commercial and consumer applications.
The company develops and manufactures products including adhesives, abrasives, filtration systems, personal protective equipment, medical and dental supplies, electrical and electronic materials, automotive components, reflective materials and workplace safety solutions.
