September 6, 2013
The Timken Company announced Friday that its board of directors has approved a plan to separate the company’s steel business from its bearings and power transmission business through a spinoff, creating two publicly traded companies.
The plan calls for the new engineered steel company to operate as an independent publicly held company with estimated annual revenue of approximately $1.7 billion. The bearings and power transmission business will continue to operate as The Timken Company with estimated annual revenue of approximately $3.4 billion.
The transaction is expected to be tax-free to shareholders and should be completed within a year.
“Over the past several years, we have transformed the business and delivered superior financial performance by diversifying and expanding customer markets and product lines, making strategic, accretive acquisitions, and introducing new capabilities around the world,” says James W. Griffith, Timken president and chief executive officer.
Griffith adds the companies will continue to advance their distinct growth strategies within their respective core markets, which is expected to further improve competitiveness.
“The bearings and steel businesses are well-run and well-positioned in their markets to perform well through economic cycles and have successfully implemented the Timken business model,” Griffith says.
Griffith, 59, will continue as president and chief executive officer of The Timken Company until the separation is complete, at which time he plans to retire after 30 years of service. The board plans to name Richard G. Kyle, 47, as The Timken Company’s new president and chief executive officer at that time.
Ward J. “Tim” Timken, Jr., 46, is expected to lead the new engineered steel company as its chairman and chief executive officer.