Timken Co. (TKR) will sell its needle roller bearings business
to Japan's JTekt Corp. (6473.TO) for about $330 million.
The company had said Monday it was in talks about a potential
sale of the business, which comes during a time of reorganization
in the auto-parts sector due to weak demand. The Nikkei's Sunday
edition reported JTekt would by the operations for about $316.6
million.
Timken has seen the bearings business, which makes up about 20%
of its total revenue, suffer as orders for bearings and specialty
steel fall. It has been cutting jobs and production to match
slowing demand and said it might not make money this year.
Chief Executive James Griffith said Wednesday the deal was "a
major step forward" in the company's strategy to focus on sectors
with strong markets.
Timken, which has been suffering from an industrywide slump in
steel demand among its key buyers in the automotive, construction
and industrial-equipment sectors, said it will use proceeds from
the sale for increased liquidity and general corporate purposes. It
said it expects the deal to close by the end of the year.
Timken bought the bearings business as part of its buy of
Ingersoll-Rand Co.'s (IR) bearings and motion-control components
unit in 2003.
Shares closed Tuesday at $20.26 and haven't traded
premarket.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com