TIMKEN Completes Acquisition of Philadelphia Gear Manufacturing Company

Canton, OH - July 4, 2011 - Timken Bearings (NYSE: TKR) announced on July 1st, US time that the company has completed the acquisition of the Philadelphia Gear Manufacturing Company. The price is 200 million US dollars. Philadelphia Gear Manufacturing is a leading provider of gearing systems and after-sales services for the industrial and marine industries.

Tim Griffith, President and CEO of Timken Bearings, said: "The acquisition of Philadelphia Gear Manufacturing can advance our strategy of further enriching the product portfolio beyond bearing to provide customers with a more comprehensive mechanical power transmission service. We welcome the employees, superior brand and reputation of Philadelphia Gear Manufacturing to join the Timken family."

In the 12 months to March 2011, Philadelphia Gear Manufacturing's sales were approximately $85 million. The company then received a $80 million contract to provide the US Navy with a main reduction gear unit. In addition to maritime applications, the company also provides expertise in quality gearing, replacement products and services for the growing energy and infrastructure markets.

Headquartered in King's of Prussia, Pennsylvania, Philadelphia Gear Manufacturing has five technical service centers in the United States and six global sales offices outside the United States. Its addition can bring more mechanical power system expertise. The Philadelphia Gear Manufacturing Company currently employs 220 people, and Timken and its management plan to set up more offices to expand its service model globally.

Timken acquired all of Philadelphia Gear Manufacturing's assets through its wholly-owned subsidiary, Timken Gears & Services Inc., and incorporated the new gear services business into the Timken Processing Equipment Industry Division. Timken expects the addition of Philadelphia Gear Manufacturing to increase its first full-year earnings after the acquisition and will generate revenues in excess of its acquisition capital costs within three years (to 2014).

Chris Coughlin, President of Processing Equipment Industry, Timken Bearings, said: "The combination of Philadelphia Gear Manufacturing and Timken will bring a strong integration effect, further strengthening the company's power and providing customers with a wider range. The value, while bringing new opportunities for profitable growth.” Coughlin appointed Carl Rapp, the current president of Philadelphia Gear Manufacturing, as the head of Timken Gears and Services Inc., to leverage the best of both worlds. Rapp said: "By joining Timken, we will have the opportunity to create a broader platform to expand our services globally. This will benefit our customers and employees."

Deloitte and Jones Day acted as consultants to Timken in the transaction.