Timken Case
Introduction
Timken Company was the leader in Bearings Industry, however lately the revenues had been declining owing to its cyclical nature and decreased demand for bearings. Timken was facing increased competition from Europe and Japan who were the leading manufacturers of ball bearings. To fight these imports Timken decided to pursue the strategy of bundling where in it could add additional products and services to its products and provide more value to its customers. Timken then started a companywide restructuring to consolidate business operations and also add new products to their portfolio.
Torrington Acquisition
To fulfill the above stated objectives Timken decided to pursue the acquisition strategy and chose Torrington as its potential target firm. Both Timken and Torrington had more than 100 years of operating experience in anti-friction products. Torrington was therefore chosen to be the good fit for the company, primarily because: * Torrington would help Timken gain foothold in Europe from where it derived 17% of its revenues, hence increasing its market share and elevating it to top three position in the in the global bearing Industry which will increase its global presence. * It brings two big names into a single enterprise with a broader range of innovative and complementary product lines as there was not much overlap in the product portfolio. * Torrington is a leader in cylindrical, spherical, needle roller, ball bearings and motion control components and assemblies and Timken specializes in tapered roller bearings and alloy steel products. Combined they would be leader in these complimentary services. * Torrington’s offerings in automotive industry that included the power train applications were a perfectly well suited for Timken’s offering of tapered bearings for wheel ends and drivelines. This would strengthen its position as one of the top suppliers of automotive components worldwide. * Torrington’s expertise in
Timken Company was the leader in Bearings Industry, however lately the revenues had been declining owing to its cyclical nature and decreased demand for bearings. Timken was facing increased competition from Europe and Japan who were the leading manufacturers of ball bearings. To fight these imports Timken decided to pursue the strategy of bundling where in it could add additional products and services to its products and provide more value to its customers. Timken then started a companywide restructuring to consolidate business operations and also add new products to their portfolio.
Torrington Acquisition
To fulfill the above stated objectives Timken decided to pursue the acquisition strategy and chose Torrington as its potential target firm. Both Timken and Torrington had more than 100 years of operating experience in anti-friction products. Torrington was therefore chosen to be the good fit for the company, primarily because: * Torrington would help Timken gain foothold in Europe from where it derived 17% of its revenues, hence increasing its market share and elevating it to top three position in the in the global bearing Industry which will increase its global presence. * It brings two big names into a single enterprise with a broader range of innovative and complementary product lines as there was not much overlap in the product portfolio. * Torrington is a leader in cylindrical, spherical, needle roller, ball bearings and motion control components and assemblies and Timken specializes in tapered roller bearings and alloy steel products. Combined they would be leader in these complimentary services. * Torrington’s offerings in automotive industry that included the power train applications were a perfectly well suited for Timken’s offering of tapered bearings for wheel ends and drivelines. This would strengthen its position as one of the top suppliers of automotive components worldwide. * Torrington’s expertise in