Timken Case
Pepperdine University
The George Graziadio
School of Business and Management
DUBOS J. MASSON FINC 624
BUSINESS VALUATION
SUMMER II – 2015
Timken Co. Case Writeup
Fatmah Alyami
Wenting Yu
Meshal Alyami
Shengxu Li
Tongkai Zhang Yuqing Zhang
Timken Case WriteUp
● How does Torrington fit with The Timken Company? o What are the expected synergies? We believe that Torrington fits in with Timken Co. and this acquisition will generate positive operating synergies for Timken Co. The reason being is that they both operate in the same industry and produce different and complementary products.
Another reason is that both companies are in business with many of the same customers, making it more efficient for these customers to get what they need from one company. As stated in the case the two companies have only a 5% overlap in their product offerings and the customer lists overlapped by approximately 80%, therefore, they will be able to create more value for customers with a more complete product line.
In Addition, this merger is expected to result in 80 million cost saving by the end of 2007, because there will be redundancies in the sales forces that would be minimized. Timken is also expected to realize significant purchasing synergies by having higher negotiating power with suppliers due to larger volumes.
Furthermore, This acquisition offers Timken the chance to distinguish itself from their competitors by providing their customers with more completed products such as combining Timken cylindrical bearing with flap like parts from Torrington instead of letting the customers do it themselves, that way they can add enough value to increase margins.
Finally, this would increase their market share within the global bearing industry, and make it the thirdlargest producer of bearings in the world. Timken would also increase its penetration of the global bearing market from 7% to 11%
The George Graziadio
School of Business and Management
DUBOS J. MASSON FINC 624
BUSINESS VALUATION
SUMMER II – 2015
Timken Co. Case Writeup
Fatmah Alyami
Wenting Yu
Meshal Alyami
Shengxu Li
Tongkai Zhang Yuqing Zhang
Timken Case WriteUp
● How does Torrington fit with The Timken Company? o What are the expected synergies? We believe that Torrington fits in with Timken Co. and this acquisition will generate positive operating synergies for Timken Co. The reason being is that they both operate in the same industry and produce different and complementary products.
Another reason is that both companies are in business with many of the same customers, making it more efficient for these customers to get what they need from one company. As stated in the case the two companies have only a 5% overlap in their product offerings and the customer lists overlapped by approximately 80%, therefore, they will be able to create more value for customers with a more complete product line.
In Addition, this merger is expected to result in 80 million cost saving by the end of 2007, because there will be redundancies in the sales forces that would be minimized. Timken is also expected to realize significant purchasing synergies by having higher negotiating power with suppliers due to larger volumes.
Furthermore, This acquisition offers Timken the chance to distinguish itself from their competitors by providing their customers with more completed products such as combining Timken cylindrical bearing with flap like parts from Torrington instead of letting the customers do it themselves, that way they can add enough value to increase margins.
Finally, this would increase their market share within the global bearing industry, and make it the thirdlargest producer of bearings in the world. Timken would also increase its penetration of the global bearing market from 7% to 11%