Chemours, DuPont, and Corteva shares rally after settlement deal in drinking water claims
Published: 10:39 02 Jun 2023 EDT
Chemours Company, DuPont (NYSE:DD) de Nemours, Inc, and Corteva, Inc have jointly announced a settlement agreement in principle to comprehensively resolve all per and polyfluoroalkyl substances (PFAS)-related drinking water claims of a defined class of public water systems that serve the vast majority of the US population.
Shares of Chemours soared 25% to $33.93, while DuPont (NYSE:DD) stock rose 6% to $71.60 and Corteva shares gained 3% to $55.30 in Friday morning trading.
The companies will collectively establish and contribute a total of $1.185 billion to a settlement fund, with Chemours contributing 50% (about $592 million), and DuPont (about $400 million) and Corteva (about $193 million) collectively contributing the remaining 50%, which is consistent with the binding Memorandum of Understanding between the companies reached in January 2021.
Chemours said it will take a pre-tax charge in the current quarter of $592 million related to the fund.
The companies added that they expect to finalize an agreement soon and the settlement will be subject to approval by the US District Court for the District of South Carolina.
Following the news, Mizuho analysts said that their immediate reaction is that the $1.185 billion settlement “is materially below investors' fears and should capture the overwhelming majority of cases,” Investing.com reported.
PFAS, or ‘forever chemicals’, which have been used for decades in manufacturing non-stick coatings such as Teflon, have also been linked to cancer, hormonal dysfunction, weakening the immune system as well as environmental damage.
Contact Sean at sean@proactiveinvestors.com
