Manroland, the world's second-biggest maker of printing presses, has called off merger talks with Heidelberg due to poor financial results at its troubled larger rival, three sources familiar with the matter said.
Under the circumstances it is not defensible in view of the responsibility that manroland has to its customers and employees, one person told Reuters on Monday.
Manroland's majority owner Allianz Capital Partners and minority partner MAN didn't like what they saw in due dilligence, the source continued.
The deal would make sense in principle but not at the current moment and certainly not in 2010 -- perhaps more in the mid to long term. There is no belief in the possibility of financing it, another source said.
The person said one reason was Heidelberg's warning late on Friday that sales and orders would remain below its expectations, leading to an operating loss that could as much as triple over the previous fiscal year that ended in March.
Heidelberg, manroland, MAN and Allianz declined comment.
Heidelberg shares fell by more than a fifth by 1112 GMT (7:12 a.m. EDT).