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    HomeWorld3M Agrees to Pay More Than $5.5 Billion over Combat Earplugs

    3M Agrees to Pay More Than $5.5 Billion over Combat Earplugs

    3M Agrees to Pay More Than $5.5 Billion over Combat Earplugs

    3M Co. has tentatively agreed to pay more than $5.5 billion to resolve over 300,000 lawsuits claiming it sold the US defective combat earplugs, people familiar with the deal said.

    The settlement would avert a potentially much larger liability that 3M sought to curb through a controversial bankruptcy case that ultimately collapsed. The sum is about half the roughly $10 billion some financial analysts predicted 3M could end up paying over allegations that the earplugs didn't adequately protect the hearing of service members.

    Traders welcomed the resolution. 3M shares were up nearly 5% at $103.87 at 2 p.m. in .

    “Sounds like 3M negotiated a pretty good deal for itself, given this litigation has been weighing on them for the better part of a decade,” said Carl Tobias, a University of Richmond law professor who teaches about product liability cases.

    A 3M representative said the company doesn't comment on rumor or speculation.

    Analysts at Barclays had estimated that the company's potential liability was about $8 billion. Bloomberg Intelligence calculated it could be as much as $9.5 billion. While the settlement was at the low end of BI's estimates, “it may accelerate negative rating activity as S&P and Moody's have not fully accounted for the legal overhangs,” BI analysts Joel Levington and Michael Doto wrote. They added that 3M's -forma net leverage “could land between 3.3-4.2x —…

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