3M Arrives At $5.5B Settlement Over Its Faulty Military Earplugs: Report

3M Co MMM has reportedly agreed to provide more than $5.5 billion to settle over 300,000 lawsuits accusing it of selling defective combat earplugs to the U.S. military.

The sum agreed upon is about half of about $10 billion the company could have ended up paying for the allegations of sub-standard earplugs for service personnel, reported Bloomberg.

According to Bloomberg Intelligence, 3M’s potential liability was $9.5 billion, whereas Barclays PLC BCS pegged it at $8 billion.

The latest settlement would stave off a larger liability for the industrial conglomerate.

Also Read: 3M Q2 Earnings Top Estimates 

“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,” the report quoted University of Richmond law professor Carl Tobias.

Service personnel alleged that they developed hearing loss and tinnitus, a buzzing or hissing sensation in the ears from using 3M’s earplugs.

The lawsuits also accused the company of deliberately failing to warn the U.S. government or users despite knowing the earplugs were too short to work optimally.

Under the terms of the settlement, 3M would reportedly pay out the money over five years.

Price Action: MMM shares are trading higher by 5.44% at $104.33 in premarket on the last check Monday.