(Bloomberg) -- 3M Co. has agreed to pay as much as $12.5 billion over 13 years to resolve claims that so-called forever chemicals it manufactured for decades polluted drinking water supplies across the US.
The deal announced Thursday resolves current and future claims by municipal water authorities over per-and polyfluoroalkyl substances, known as PFAS. The chemicals were used in a variety of products, though claims over water pollution have focused on PFAS-containing foams used to extinguish fires at military bases and airports.
3M rose as much a 5.1% after normal trading hours following. The shares were up 3.5% at 5:29 p.m. in New York.
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Under the agreement, 3M will pay a minimum of $10.5 billion and as much as $12.5 billion. The final amount depends on how much PFAS is found in water systems that haven’t been tested yet, said plaintiff’s attorney Scott Summy.
The pact covers all present and future claims that PFAS sullied drinking water supplies at any level, according to the company. The deal is a significant milestone that resolves a portion of what analysts have estimated could be tens of billions of dollars in potential liabilities stemming from 3M’s legacy of manufacturing PFAS chemicals.
Bloomberg News reported earlier this month that 3M had a reached a tentative settlement of water pollution claims for at least $10 billion.
The water pollution cases are part of roughly 4,000 lawsuits targeting 3M and other companies over PFAS environmental harms that have been consolidated before a federal judge in Charleston, South Carolina. The deal also provides funding for drinking water providers that may detect PFAS contamination in the future, 3M said.
“This is an important step forward for 3M, which builds on our actions that include our announced exit of PFOA and PFOS manufacturing more than 20 years ago, our more recent investments in state-of-the-art water filtration technology in our chemical manufacturing operations, and our announcement that we will exit all PFAS manufacturing by the end of 2025,” 3M Chief Executive Officer Mike Roman said in a statement.
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The settlement will need to be approved by the judge in Charleston. The company said it plans to take a $10.3 billion pre-tax charge in the second quarter.
The money will be allocated to water systems in two phases, Summy said. In the first phase, more than 5,000 systems that have already detected PFAS will be paid. The second phase will involve systems that will test for chemicals in the future.
“We have reached the largest drinking water settlement in American history which will be used to help filter PFAS from drinking water that is served to the public,” Summy said. “The result is that millions of Americans will have healthier lives without PFAS in their drinking water.”
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