IMI breaks off Sulzer takeover talks

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IMI, the specialist engineering group, has broken off acquisition talks with Sulzer Thermtec, a Swiss company.

In September IMI said it hoped to acquire Sulzer's industrial values division, which makes heavy- duty products for power stations and has sales of pounds 30m a year.

However, IMI said yesterday: 'During the process of due diligence certain facts emerged which meant IMI and Sulzer were unable to reach agreement and the proposed acquisition will not now take place.'

The purchase would have significantly boosted IMI's worldwide market share in the sector.

IMI said it would look at other acquisition opportunities in similar areas. A year ago the group bought Walter, a small Swiss pneumatic valves and cylinders maker, for an undisclosed sum.

IMI reported a fall in taxable profits from pounds 40m to pounds 36.5m for the half-year to 30 June, on turnover down from pounds 515m to pounds 496m. Earnings per share slipped from 8.1p to 7.3p.

City analysts estimate full-year profits will be down from pounds 73m to about pounds 66m due to the impact of the recession. The results are due next month.

IMI shares closed 2p higher at 264p yesterday.