German heavy industry giant ThyssenKrupp said on Tuesday it is abandoning plans to sell its rail and construction activities after failing to secure sufficient offers.
Instead, ThyssenKrupp will close down the rail unit and lay off hundreds of employees, but the construction equipment unit will be kept, the company said in a statement.
"After an intensive exploratory phase, purchase bids have been reviewed and talks held with potential buyers over the past few weeks. None of the bids met the financial expectations of ThyssenKrupp," the statement said.
ThyssenKrupp had announced in May 2013 that it was looking to sell the businesses -- ThyssenKrupp GfT Gleistechnik and ThyssenKrupp Bautechnik -- due to limited growth prospects.
The activities represent combined sales of around 400 million euros ($555 million) and some 800 employees.
ThyssenKrupp said it would now shut down the railway equipment business and cut 260 jobs.
"Negatively impacted by the rail cartel and unprofitable, the railway equipment business has no growth prospects on the German market and is under extreme cost pressure," said board member, Klaus Keysberg.
"Unfortunately we see no realistic chance of the railway equipment business making a value-adding contribution to the group's earnings in the long term," he said.
By contrast, "the profitable construction equipment operations will be continued and repositioned following a business model analysis," Keysberg said.