Merrill Lynch is facing a re-think on the sell-off of Mannesmann Plastics Machinery Group, a subsidiary of Siemens, after Apax Partners was forced to pull its offer for German engineering company's unit.

Merrill Lynch has been advising Siemens for nearly six months on the sale of Mannesmann Plastics. An agreement was struck to sell the unit to Apax in May of this year. Apax sources have confirmed that the global private equity fund has been forced to break off its agreement to buy Mannesmann Plastics due to the unit's deteriorating financial position. The sale agreement concluded in May was based on the unit's annual sales for 2000, which amounted to €1.4bn ($1.3bn).