TimkenSteel has signed a purchase agreement with Daido Steel’s Shanghai division to sell TimkenSteel Shanghai, a sales unit fully owned by Timken, that provides technical support in China.
The agreement entails approximately $7mn in cash and is subject to the completion of customary due diligence. The transaction is expected to close in Q3 2021 with the specific target date of Jul 8.
Through the transaction, Daido plans to transform from a supplier to a key authorized distributor of TimkenSteel products in China. The goals for the acquisition include improvement in its supply chain of SBQ products, expanding product offering, and increasing value to consumers.
Daido and Timken have a background of collaboration on technical assistance along with product development to support key customers in Asia and the US. The companies originally entered into an agreement in January 2007 to initiate joint projects to manufacture and supply specialty steel.
Based in Canton, Ohio, TimkenSteel’s annual steel melt capacity is about 2mn nt and it produces carbon steel, alloy, and micro-alloy steel in specialty bar, seamless mechanical tubing, value-add components, billets, and bottom-poured ingots.