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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.
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.
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