Stockholm —The Sandvik Group will purchase American metal cutting tool division Valenite from Cincinnati-based Milacron, Inc., for $175 million. The deal is the second cutting tool business sale by Milacron in 2002. In May, the company announced the sale of European division Widia to Kennametal, Inc., for about $170 million.

Calling the industrial market severely depressed, Milacron chairman and president Ronald Brown said that U.S. cutting tool businesses have been only marginally profitable.

"We are aligning our future with two important long-term trends in manufacturing," Brown said. "The first and most important is the increasing use of plastics as the material of choice for products made around the world. The second is the growing demand for cleaner, healthier and environmentally friendlier industrial fluids."

Analysts say the sale will help Milacron weather severe downturns in sales of plastics processing equipment, a fact Brown acknowledges. Sandvik will use its assets to help Valenite continue in business, he said. "As with the sale of Widia ..., for Valenite our objective was to reach an agreement with a strategic buyer who values our people and assets and intends to grow the business," Brown said. Valenite employs about 1,300 in the United States.

Milacron owns the round cutting tool businesses of Talbot Holdings Ltd., which it bought in 1995. Those businesses are Brubaker Tool, Fastcut, Weldon Tool and New England Tap. According to a Milacron spokes-person, there are no immediate plans to divest the round tool businesses, but the company will concentrate on plastics machinery and fluids in the future.

Sandvik's tooling business president Anders Thelin said the purchase adds to Sandvik's customer base, especially in the automotive industry.

"Through its global strength, Sandvik will enhance Valenite's product program and competitive ability and further develop the total offering to the customer," Thelin said.