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Timken completes sale of belts business to Gates

Timken completes sale of belts business to Gates

Money Moves

Divestiture expected to improve industrial segment margins and add to earnings in 2027

Today: Sale closes

Overview

Updated 1 hour ago

Timken completed the sale of its belts business to Gates on September 28, 2026. The deal removes a product line spanning industrial, commercial, and consumer belts from the North Canton, Ohio company's portfolio.

The divestiture follows Timken's 80/20 approach to portfolio management, which directs investment toward the most profitable products. Timken expects the sale to improve adjusted EBITDA margins in its Industrial Motion segment and deliver accretive earnings per share in 2027. Proceeds will fund capital allocation priorities.

Why it matters

Timken trades a lower-margin product line to concentrate on precision motion technology — a divestiture pattern reshaping industrial manufacturing.

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Key Indicators

$4.6B
Timken 2025 sales
Revenue across the full advanced motion technology portfolio before the belts divestiture.
~19,000
Timken employees
Workforce across 45 countries, before the belts operation moved to Gates.
45
Countries with Timken operations
Geographic footprint reported for the company in 2025.
2027
Expected year of EPS accretion
Timken expects the divestiture to add to earnings per share starting in fiscal 2027.

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Organizations Involved

Timeline

May 2026 September 2026

2 events Latest: Today
  1. Sale closes

    Today Transaction

    Timken completes sale of belts business to Gates; Gates takes control of San Jose Iturbide, Mexico facility.

  2. Timken and Gates sign belts deal

    Agreement

    Timken announces definitive agreement to sell belts business assets to Gates; terms undisclosed.

Scenarios

1

Timken hits its 2028 margin targets

Likely Resolves by Mar 1, 2029

Discussed by: Timken management, which called the divestiture an important milestone toward stated targets

Timken expects the belt divestiture to lift adjusted EBITDA margins in its Industrial Motion segment. Management stated the sale advances the company's 2028 targets, which were presented at the Investor Day on May 20, 2026. Full results will appear in the company's earnings reports through 2028.

2

Gates grows North American power transmission

Likely Resolves by Feb 15, 2028

Discussed by: Gates management, which described the acquisition as strengthening its position in power transmission

The deal adds manufacturing capacity in San Jose Iturbide, Mexico, and customer relationships in industrial OEM, aftermarket, and power sports markets. Gates' Americas president said the acquisition supports growth in industrial and mobility markets. Gates plans to leverage its in-region manufacturing and distribution footprint to support customers during the transition.

3

Timken deploys proceeds into capital moves

Uncertain Resolves by End of 2027

Discussed by: Timken management, which stated proceeds would fund capital allocation priorities

Timken could announce an acquisition, expand its share buyback program, or raise its dividend using the belt sale proceeds. The company has not specified which option it will choose, and deal terms were not disclosed, so the cash amount is unknown.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

2018-2024

GE splits into three companies (2023-2024)

General Electric spent years divesting businesses, including selling its BioPharma unit to Danaher for $21.4 billion in 2020, then split into GE Aerospace, GE HealthCare, and GE Vernova by April 2024.

Then

Each new company trades independently with clearer investor focus on its own market.

Now

GE's simplification unlocked higher combined market value than the conglomerate structure.

Why this matters now

GE's reshaping shows how industrial conglomerates prune unrelated lines to concentrate on core strengths, the same logic behind Timken's belts divestiture.

January-August 2021

Eaton sells hydraulics to Danfoss (2021)

Eaton agreed in January 2021 to sell its hydraulics business to Danfoss for about $3.3 billion. The deal closed in August 2021, removing a cyclical industrial line from Eaton's portfolio.

Then

Eaton's portfolio became purely focused on power management products.

Now

Danfoss strengthened its hydraulics position while Eaton grew its electrical business.

Why this matters now

A direct industrial parallel: an established manufacturer selling a capable but lower-margin business to a buyer that treats it as core, while the seller reinvests in its main franchise.

Sources

(7)