3M Co (MMM:US) is reportedly in the advanced talks of reaching a preliminary agreement to pay over $5.5 billion to settle more than 300,000 lawsuits. 

These lawsuits allege that the company supplied defective combat earplugs to the United States military.

While negotiations are still underway, Bloomberg News reported that 3M is close to agreeing to a payment of approximately $5.5 billion to settle the claims. 

As a result, 3M stock rose more than 4% on the better-than-expected settlement figures.

The potential settlement amount being discussed is notably lower than the previously estimated range of $8 billion to $15 billion that some analysts had predicted. Barclays analysts were looking for a figure of $8 billion.

3M's financial capacity to manage a substantial settlement related to earplugs has been significantly affected by a previous tentative settlement reached in June, which is associated to the so-called “forever chemicals” in municipal drinking water. The tentative agreement calls for the company to pay as much as $12.5 billion over five years.

3M paid $9.1 million to the U.S. government five years ago to resolve allegations that its earplugs were defective.

Lawmakers Tommy Tuberville, Daniel Goldman, Ro Khanna, Chuck Fleischmann, and Angus King were trading 3M shares earlier this year. Both Goldman and Khanna reported the $15,000 - $50,000 worth of sales of 3M stock in recent months.

The stock is down around 15% year-to-date.