Shares of 3M climbed to their highest level in more than eight years on Wednesday after the industrial products manufacturer agreed to pay $7.35 billion to resolve personal injury claims linked to its firefighting foam, easing a major legal uncertainty that had weighed on the company’s valuation.
The settlement covers claims brought by people who allege that exposure to per- and polyfluoroalkyl substances (PFAS), commonly known as “forever chemicals”, in 3M products caused harm to their health. The payments will be distributed over nine years and could cover as many as 120,000 claimants, the company said.
3M announced the agreement on Tuesday after US markets closed. The shares rose as much as 10% on Wednesday, reaching their highest level since March 2018, when they traded above $200. In afternoon trading, the stock was up 9.8% at $194.37.
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The market reaction suggests investors viewed the agreement as a significant reduction in the company’s exposure to a prolonged legal dispute. UBS analyst Amit Mehrotra said investors had anticipated a settlement of approximately $10 billion, making the $7.35 billion agreement more favorable than expected.
He described the settlement as removing a “meaningful overhang” on 3M’s shares, pointing to the importance of resolving a liability that had created uncertainty around future cash flows and the company’s financial outlook.
3M plans to record a $5.8 billion pre-tax charge in the fourth quarter, representing the present value of the future settlement payments. The difference between that figure and the headline $7.35 billion settlement reflects the timing of payments over the nine-year period.
The company did not admit liability as part of the agreement.
The litigation centers on PFAS chemicals used in products manufactured by 3M, including aqueous film-forming foam, a firefighting product designed to extinguish high-intensity fires. Such foam has been used at military installations, airports, and other locations where fuel fires pose serious risks.
PFAS are a broad group of synthetic chemicals valued for their resistance to heat, water, and oil. Their durability has also created environmental and public health concerns because many compounds persist for long periods and do not readily break down in the human body or the environment.
Exposure to certain PFAS has been associated with health problems including elevated cholesterol, low birth weight, kidney cancer and testicular cancer. The litigation has focused on allegations that exposure through firefighting foam and other products caused personal injuries.
The agreement is expected to address about 99% of personal injury claims filed both inside and outside the federal multidistrict litigation involving aqueous film-forming foam. The cases are being handled in federal court in Charleston, South Carolina.
Kevin Rhodes, 3M’s chief legal affairs officer, said during a conference call on Wednesday that the settlement was designed to address existing and future PFAS personal injury claims. He said the company expects to make most of the payments between 2028 and 2033.
However, the agreement remains subject to sufficient claimant participation. Rhodes said 3M has the right to withdraw if too few claimants accept the settlement, although the company does not expect that condition to arise.
That provision makes claimant participation a central factor in determining whether the agreement will become effective. The settlement’s broad coverage could substantially reduce the number of unresolved claims, but its final implementation will be based on the acceptance process.
US District Judge Richard Gergel on Wednesday stayed personal injury proceedings against 3M in the litigation, urging the company and claimants to devote “significant time and effort” to implementing the agreement.
Plaintiffs’ lawyers David Hoyle and Fred Thompson said in a joint statement that the settlement would benefit thousands of people who had sought answers and accountability for nearly a decade.
The arrangement offers claimants a structured route to compensation while giving 3M greater certainty over a significant category of legal exposure. For the company, the alternative could have involved years of additional litigation, with unpredictable legal costs and potential damages.
PFAS Liabilities Remain an Industry-Wide Problem
The latest agreement is part of a wider effort by 3M to resolve claims arising from the manufacture and use of PFAS. In 2023, the company agreed to pay $10.3 billion to settle claims brought by US cities and towns alleging that PFAS contamination had affected drinking water supplies. It also reached a separate settlement of between $400 million and $450 million with New Jersey in 2025.
The distinction between those agreements and Wednesday’s settlement is clear. The earlier deals addressed claims involving contaminated public water systems, while the latest agreement focuses on personal injury allegations connected to firefighting foam.
Together, the settlements represent a substantial financial cost for 3M and demonstrate how liabilities associated with chemicals used across multiple industries can accumulate over many years.
The company said it stopped manufacturing PFAS in 2025, but ending production does not eliminate the legal and financial consequences of historical exposure. Claims can continue to emerge long after products have left the market, particularly where chemicals persist in the environment, and allegations involve exposure over extended periods.
The wider litigation also extends beyond 3M. DuPont and its corporate spinoffs, Corteva and Chemours, face PFAS-related lawsuits, exposing several major chemical manufacturers to potential compensation costs and prolonged legal proceedings.
For investors, the 3M settlement provides a clearer estimate of one major category of potential liability. The lower-than-expected amount has helped improve sentiment towards the stock, while the payment schedule spreads the financial burden across several years rather than requiring an immediate cash outflow.
However, the agreement does not resolve every PFAS-related dispute facing the company, nor does it remove the broader regulatory and reputational risks associated with the chemicals industry. Its significance lies in reducing uncertainty around a large group of personal injury claims that could otherwise have remained a source of financial and operational pressure.
The rally in 3M shares shows how investors respond when a major corporate liability becomes more predictable. The settlement comes at a considerable cost, but a defined payment structure and a mechanism for resolving thousands of claims give the company a clearer basis for planning its finances and rebuilding investor confidence.