In this case we analyst whether The firm should get Torrington business from Ingersoll-Rand by money, issuing talk about to open public or giving share straight to IR. IRGI wanted to divest Torrington and Timken seek to acquire it. After merging with Torrington The firm will be globe third major company in bearing market and This brand would gain more revenue as Timken and Torrington has regarding 80% of overlapped client. Moreover after the synergy they can reduces expense, increase market shares and have more development lines. As Timken influence ratio is definitely not good, and so they didn't want to raise funds that must be paid for the acquiring mainly because if they were doing so the investment-grade rating will probably be deceased. Timken rating now is BBB so they couldn't risk this to go reduce. As The firm stock price are 19$/share they would have to demand a lot of stocks for the population to gain enough money intended for the acquisition and there is a risk that Timken could not sell all shares. For the last option through issuing reveal directly to MARCHAR would profit Timken since it will change capital structure lessen debt even more equity. However it wouldn't happen either because option is likely to make IR take those risk for keeping to This brand stocks whilst they already have plan to invest in additional segment. The group suggests that Timken should acquire Torrington by providing share straight to IR pay cash using this method will cause a win-win condition.
Timken Business was a bearing company who had been the manufacturer as well as the developer at the same time. They have been functioning their business for over 100 years which is well-known that their very own business is a leader inside the bearing market. In the year of 2002, the business was selecting in acquiring the Torrington Business from Ingersoll-Rand Company since they want the synergies to compliment their expansion. Thus, The firm had to use more than 80$ million in this acquisition which may make the organization facing the financial difficulties. That is if they give a major amount of acquisition, it will certainly affect for their balance sheet and directly effect on their investment-grade rating. This was a quite challenge to Timken Company. They have to carefully decide on the particular best way to control their financial deal. The Timken Organization SWOT Evaluation
This brand was identified since 1898, therefor the corporation had experience in bearing manufacturing. Weak points
Timken wasn't the biggest bearing manufacturers. There are several bigger competition compare to This brand which could have access to wilder band of customers. This brand could not adjust their organization in states so well. In 1999, it had to slice 20% of production capacity. Opportunities
The us government increased antidumping duties approximately 59. 3%. As a result, price of imported bearing were expected to boost. Timken can expand to foreign countries to attract really foreign consumers. Enhancing basic products with additional element of add more value could be an opportunities for The firm to fight with foreign rivals which just offer simple products. The company may offer installation and maintenance support, as well as constant engineering. This may benefit customers by reducing the number of suppliers and relieving them of routine labor- and cost- intensive jobs. If This brand successfully combine with Torrington, it will turn into third-largest producer of bearing in the world. Goodies
The procedures related to metal industry don't consider the main advantage of bearing sector since 2 weeks . secondary metal product. Overseas competitors can sell precisely the same quality goods at cheaper price. Economic recession decreased automobile demand, hence decreased bearing demand. Analyst predicted that bearing market would have simply 2-3% domestic growth.
Torrington with This brand Company
If Timken effectively acquired Torrington, it would become 3rd greatest bearing maker in the world. The 2 companies acquired 5% overlap of products yet 80% of...