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Timken climbs as co. announces spinoff plans

NEW YORK (AP) -- Shares of Timken climbed on Friday as it announced plans to split into two publicly traded companies.

Late Thursday, Timken Co. said that its board approved a plan to separate its steel business from its bearings and power transmission business through a spinoff. The bearings and power transmission business will continue to operate under the Timken name, while the new engineered steel company will operate as an independent publicly held company.

The transaction is expected to be completed within a year.

Steve Barger of KeyBanc Capital Markets said in a client note that investors are likely to have a favorable reaction to the news, as they'd been waiting for the company to announce a decision for some time. Timken had formed a strategic committee in June to consider the split of the business.

The analyst maintained a "Buy" rating and boosted Timken's price target to $70 from $66.

Timken said it does not comment on analyst reports.

Timken's stock added $2.73, or 4.5 percent, to $62.99 in midday trading. The stock of the Canton, Ohio, company has gained 32 percent this year.