The Timken Company's board of directors has approved a plan to pursue a separation of the company's steel business from its bearings and power transmission business through a spinoff, creating two publicly traded companies.

Under this plan, the new engineered steel company will operate as an independent publicly held company with estimated annual revenue of approximately $1.7 billion. The bearings and power transmission business will continue to operate as The Timken Co. with estimated annual revenue of approximately $3.4 billion. The transaction is expected to be tax-free to shareholders and should be completed within 12 months.

The board's decision to split Timken into two companies resulted from a thorough evaluation by a strategy committee composed of independent directors and established by the board in response to shareholder input. 

With the help of financial and strategic advisors, the strategy committee carefully evaluated the financial and operational implications of separating the company's businesses, along with potential changes to the company's corporate governance and capital allocation strategy.

The Timken Company's product portfolio includes a broad range of bearings and related mechanical power transmission components and services.  Employing nearly 17,000 associates, the company will have 35 manufacturing plants, 25 service and repair facilities, four technology centers, and an extensive network of sales offices and warehouses around the globe. Company headquarters will remain in Stark County.

James W. Griffith will continue as president and chief executive officer of The Timken Co. until the separation is complete, at which time he plans to retire after 30 years of service. 

The board plans to name Richard G. Kyle as The Timken Company's new president and chief executive officer, succeeding Griffith. Until then, Kyle has been named chief operating officer of the B&PT business.

The board also plans to name Ward J. "Tim" Timken, Jr., to lead the new engineered steel company as its chairman and chief executive officer.