P.M. BRIEFING : Allegheny Drops Merger Plans

Allegheny International Inc., maker of Sunbeam and Oster home appliances, today said it has stopped pursuing a merger with a subsidiary of the New York investment banking firm of Donaldson, Lufkin & Jenrette Inc.

Allegheny International, which filed for bankruptcy last February, said that it does not anticipate achieving expected levels of domestic operating profit for fiscal 1989 and that the failure to achieve the profit would prevent the merger.

The company had been told by the DLJ subsidiary that the domestic operating profit results were critically important to the subsidiary’s ability to raise the financing required under the merger agreement.

Allegheny International also said it intends to file with the bankruptcy court a separate plan of reorganization for its Sunbeam Corp. subsidiary to permit it to emerge from bankruptcy in the near future while AI continued its own reorganization case.