Stock Market Watch

The Timken Company To Spin-Off Business

by ·


The Timken Company’s (NYSE: TKR) board of directors has approved plans to split steel business from bearings and power transmission business, making them two publicly traded  companies.

According to plans, the bearings and power transmission business, which has estimated annual revenue of $3.4 billion, will continue to operate as The Timken Company.

The steel unit has estimated annual revenue of $1.7 billion.

The move to split business in two comes after company’s shareholders and an activist investor urged the management to oblige their demand in order to improve the shareholders’ value. Heeding to investors’ demand, the Company’s board made a strategic committee to appraise business scenario (if steel business was separated). After the evaluation, lead independent director, Joseph Ralston concluded, “(The spin-off allows company) to more fully appreciate and value the unique strategic and financial strengths of each business.”

Under the spin-off plans, James Griffith, who at present is the CEO of the Company, will retire while Richard G. Kyle will become both the President and CEO of the bearings and power transmission unit. John M. Timken Jr. will serve as non-executive chairman of the company.

Ward Timken Jr. will be appointed as the Chairman and CEO of the steel company.

The spin-off process is expected to be completed within one year.

The proposal to split the company in two was first put forward  in 2012 by CalSTRS–California State Teachers’ Retirement System—which was also supported by activist fund Relational Investors. Earlier in May shareholders also voted in support of a spin-off.

 

 

 








More Posts by this author

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

Tags:

Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

You may also like...