A proposed $872 million takeover offer for engineering group Bradken has fallen through after the would-be buyers backed out of the deal.

In a statement to the market on Wednesday, Bradken said recent volatility in commodity and financing markets meant the private equity consortium of Pacific Equity partners and Bain Capital had been unable to finance the deal on acceptable terms.

Bradken will now focus on returning to profitable growth through cost cutting and the contribution of its recent foundry acquisition in India.

The takeover offer came in December, one day after Bradken confirmed that it would be closing its foundry in the Adelaide suburb of Kilburn by the end of 2015, with almost 120 workers to lose their jobs.

The company said the Adelaide operation was no longer profitable nor competitive with global, international plants.