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The eBearing News
May 22, 2003
Timken Takeover of NSK-Torrington
Joint Venture Still in Question
copyright © 2003 eBearing Inc.
The Timken Company (USA), in its acquisition of Torrington, has not yet included all of
Torrington's assets and operations, just as Timken warned could happen. In particular, the future
of the joint venture NSK-Torrington Co. Ltd. (Japan) has not
yet been determined. With annual sales of approximately $200 million, the fate of NSK-Torrington
is a major consideration for both NSK Ltd. (Japan) and Timken.
eBearing has confirmed, exclusively, via senior NSK officials in Japan, that the company has "not decided yet"
as to the future of that business and its relationship with Timken.
NSK-Torrington Co. Ltd. was established in 1963 as the first joint venture of its type,
involving Nippon Seiko K., Tokyo Bearing Co. and The Torrington Company. The company's first
facility, in Takasaki, produced only Torrington-engineered drawn cup needle bearings.
Forty years later, the company operates three plants in
two locations. The Takasaki #1 and Yawata (Takasaki #2) plants are in Takasaki. A third major
facility, built in 1998, is located in Haruna. In 2000, the former Tokyo Bearing plant in
Konosu was closed and production transferred to the main Takasaki facility.
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Takasaki Plant #1
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Haruna Plant
(photos courtesy NSK Ltd.)
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All told, the three facilities cover over 154,000 square meters (1.6 million square feet) of
manufacturing floorspace and employ almost 1,000 people. Annual sales are approximately
$200 million, with net income of approximately $9 million.
Product lines now include drawn cup needle roller bearings, cage & roller assemblies,
solid needle bearings, thrust needle bearings, micro shafts, sensor rotors for anti-lock braking systems,
planetary gear shafts, universal joints, linear ball bearings, cam followers,
roller followers, tension levelers, and tappet roller bearings.
Timken's acquisition of Torrington triggered a part of the agreement giving NSK the opportunity
to acquire Torrington's interest in NSK-Torrington.
However, eBearing spoke to NSK managers who believe the situation today is entirely
financial. With NSK and Timken both wanting to conserve cash and facing continuing weakness
across their markets, they claim neither company wants to take on the financial burden of
buying out this venture; in 2002, Torrington netted less than 1.8% on sales from NSK-Torrington Co. Ltd.
NSK executives told eBearing the situation does not mean NSK and Timken are otherwise at odds
in any way or in any of their business relationships. In fact, NSK specifically told
eBearing, "Timken and NSK have good relations including joint venture in China."
Just over a month ago, Timken and NSK broke ground on a joint venture facility in Suzhou, China. The
$40 million 50%/50% joint venture will produce single-row tapered roller bearings.
• article: Timken and NSK joint venture in Suzhou
In several acquisition-related disclosures, Timken discussed the NSK-Torrington joint venture situation:
We may not be able to acquire certain of Torrington's assets, which could reduce the strategic
benefits of the Torrington acquisition to us.
In connection with the Torrington acquisition, it will be necessary to obtain the consent of certain
Torrington joint venture parties and customers to the transfer of certain portions of Ingersoll-Rand's
interest in Torrington to us. If Ingersoll-Rand is unable to obtain the necessary waivers or consents
to those transfers, we may not be able to acquire the applicable asset, which may materially affect the
business of the combined company, our long-term business strategy and our projected access to certain
customers or relationships. As a result, we may not achieve all of the expected benefits of the
Torrington acquisition.
In particular, we currently believe that Ingersoll-Rand is unlikely to obtain the necessary waivers
or consents of NSK Ltd. with respect to the transfer of Torrington's unconsolidated joint venture interest
in NSK Torrington Co., Ltd. to us. NSK Torrington, a Japanese needle bearing manufacturing company,
contributed approximately $3.6 million to Torrington's 2001 income before income taxes. If Ingersoll-Rand
is unable to obtain the necessary waivers or consents, then, upon consummation of the Torrington
acquisition, NSK Ltd. will have the right to acquire Torrington's interest in NSK Torrington. Moreover,
we have existing marketing and technology sharing arrangements with NSK Ltd., which we or NSK may seek to
renegotiate or terminate if Ingersoll-Rand is unable to obtain the waivers or consents described above.
These arrangements may be material to our long-term business strategies, and therefore the modifications
of such arrangements could have material negative effect on the sales of our products.
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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