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  • 3M MMM the Aearo Technologies subsidiary and related entities have voluntarily initiated Chapter 11 proceedings to seek court supervision.
  • 3M committed $1 billion to fund a trust to resolve all claims determined to be entitled to compensation.
  • 3M and Aearo Technologies believe Combat Arms earplugs were effective and safe when used correctly, but face an increase in litigation, including approximately 115,000 claims filed and another 120,000 on an administrative filing as of June 30 2022.
  • Related: 3M shares gain as second-quarter results beat street expectations
  • Separately3M announced plans to spin off its healthcare business, allowing two public companies to pursue their respective growth plans.
  • New 3M, with revenue of $26.8 billion in FY21, will remain a global materials science innovator serving diverse end markets with science and technology, manufacturing, capabilities global and iconic brands.
  • Health Care, with revenue of approximately $8.61 billion in fiscal year 21, will be a diversified global health technology company focused on wound care, oral care, dental informatics and biopharmaceutical filtration.
  • Healthcare is currently expected to be spun off with net leverage around 3.0x to 3.5x EBITDA and positioned for rapid deleveraging.
  • Additionally, New 3M plans to retain a 19.9% ​​stake in Health Care, which will be monetized over time.
  • The company expects to complete the transaction by the end of 2023.
  • 3M will retain liability for non-healthcare related disputes, including those related to Combat Arms earplugs and PFAS.
  • Price action: MMM shares are trading up 5.59% at $141.66 when last checked on Tuesday.