Bearing ball and roller manufacturer NN Inc. (USA) has acquired the 23% share of joint venture NN Euroball Aps owned by FAG Kugelfischer Georg Schaefer AG (Germany). NN paid approximately € 13.4 million to FAG for its share and now owns 77% of the venture. SKF AB (Sweden) owns the remaining 23%.

NN Euroball ApS was set up in July 2000 as a joint venture between NN Inc., and its two largest customers, SKF and FAG. Euroball combined three ball manufacturing facilities -- in Ireland, Germany and Italy -- previously operated separately by the companies. NN took over responsibility for day-to-day operations. Dario Galetti, Managing Director of NN Euroball, had been SKF's Managing Director of the Pinerolo, Italy ball plant.

Euroball, the world's largest manufacturer of bearing balls, currently manufactures only precision 52100 chrome steel balls. Sales for the first nine months of 2002 were approximately USD $67 million, 30% of which went to unaffiliated customers worldwide. Pinerolo is the venture's primary factory, producing over 4 billion balls each year -- roughly two-thirds of Euroball's total output. For 2003, the company projects sales of 6.5 billion balls and 7 billion in 2004.

In early December 2002, NN signed a letter of intent with SKF to acquire its Veenendaal Netherlands roller and retainer factory. The structure and value of the transaction have not yet been disclosed, but it is expected to be completed during first quarter 2003

Under the shareholder agreement which formed NN Euroball, FAG and SKF were free to sell their share to NN at any time until December 31, 2002 if both sides agreed. Now after December 31, 2002, SKF can force the issue by exercising a put option which requires NN to buy out its share of the venture. In the short term, this is unlikely.

NN Chairman and CEO, Rock Baty, said, "The formation of NN Euroball was an important outsourcing model for both NN and our joint venture partners. We are pleased with FAG's decision to sell its 23% stake in the joint venture. We believe this transaction is a reflection of their ongoing confidence in NN Euroball's future ability to continue to serve INA/FAG as a long-term precision ball supply partner."

Under the shareholder agreement which formed NN Euroball, FAG is barred for several years from setting up a competing business.