Timken Divests Ownership of NRB Bearings

The Timken Company (USA, NYSE: TKR) has divested its 26% stake in publicly-traded NRB Bearings (India; BSE: 530367) to its Indian market promoters. Two Sahney family-controlled entities acquired all of Timken's 2.5 million shares for Rs230 per share, a discount from the Rs330 per share price during that trading day on the Bombay Stock Exchange and National Stock Exchange. In all, the family spent Rs580 million. NRB, now with five facilities in India, was founded in 1965 as a joint venture with French needle bearing manufacturer Nadella and the Sahney family in India. Nadella was later acquired by Torrington, and Torrington by Timken in early 2003 -- making NRB a publicly-traded Indian subsidiary of Timken. NRB manufactures needle roller, thrust and cylindrical roller bearings; the majority of its output -- 85% -- goes to automobile and light truck manufacturers. Most of that production is exported to European customers such as Renault, but the company also sells to India's growing automaker population. NRB is also seeking type approval by GM, Volvo and others. In the Indian market, NRB sales include key positions in textile machinery bearings and rail bearings. Earlier this year, Reliance Growth Fund acquired enough additional shares in NRB to push its holdings over the 5% disclosure threshold. A month ago, SNL Bearings Ltd. (India, BSE: 505827, a publicly-traded division of NRB Bearings) delisted itself from the Delhi Stock Exchange. Unlike NRB, SNL's future is uncertain. NRB has gradually been reducing its outside involvement as it has grown and been able to respond to specific Indian market needs and product development on its own. In 1999, NRB said it did not renew its technology transfer arrangement, and has been on its own with R&D since then. Timken has reportedly only been supplying financial guidance. NRB Bearings has been a consistently strong performer. For fiscal 2004, it reported sales 20% above 2003, with net profit up 57%. In the most recent second quarter, ended September 30, 2005, NRB reported net sales of Rs622 million, up 20% over 2004. Net income was Rs963 million, up 54% from 2004's Rs624 million.