Global manufacturing company Timken Co. has made a sweet move.
After splitting its steel unit into two publicly traded entities, their price on the stock market soared to the highest it's been in 35 years.
The plan to separate has been long-endorsed by Ralph Whitworth's Relational Investors LLC-a company that's been coaxing Timken to spinoff its steel sector for a while.
Bloomberg reported that CEO James Griffith will resign from his post when the larger bearings and transmission business sectors split in the next year or so. 46-year-old Ward Timken will lead the corporation in Griffith's stead.
Griffith will remain president and CEO until the division comes to fruition. Then, AP reported, he plans on retiring.
The steel company will rake in about $1.7 billion in yearly revenue, Griffith estimated.
"The 'aha' moment for the board came after meeting with the largest shareholders in recent months and finding that most backed the spinoff," Griffith told Bloomberg. "The perception was that we would not see a reevaluation of the company quickly-that would take a long time."
Canton, Ohio-based company Timken shot up 2.9 percent to $62.02 on the stock market yesterday. That's the highest price it's seen since, maybe, 1978.
As Thursday continued, the company's stock steadily rose, reaching an overall peak of 46 percent.
The company's spinoff of its steel unit is a win for Relational and the California State Teachers' Retirement System-a group that's been pushing Timken since November 2012 to split up their steel, in efforts to ramp up shareholder value.
In a statement from Ralph Whitworth's Relational and Cal STRS, the company commended Timken's decision, saying that this move will "[ensure] the long-term vitality and competitiveness of Timken as two separate companies, both of which will lead their respective industry segments for operating excellence."
Following the separation, Timken will have 17,000 employees, 35 manufacturing plants, 25 facilities for services, four tech plazas, four warehouses and five sales offices, AP reported.
Bloomberg reporters debated on the split back in February. Watch below:
