* Imerys bowed out of bidding war for U.S. firm Amcol
* CEO says the decision was tough but reasonable
* Innovation is No.1 focus for firm, he says
* Company still on lookout for acquisitions
PARIS, March 25 (Reuters) - French minerals specialist Imerys is betting on innovative products in the shale and car industries to deliver growth and still looking out for acquisitions after its failure to buy U.S. company Amcol , its chief executive said.
Two weeks ago, the world leader in specialised industrial minerals bowed out of a month-long bidding war for Amcol, which produces a type of clay used in everything from construction to oil drilling and kitty litter. U.S. firm Minerals Technologies said it would buy the company for $1.7 billion.
The Amcol deal would have been its biggest acquisition ever, expanding the size of its business by 20 percent and giving it a solid footing in the United States. But the bidding battle with Minerals made it too expensive, Imerys Chief Executive Gilles Michel told Reuters in an interview.
"It wasn't an easy decision," he said. "This deal made a lot of sense to us. But a project, however attractive, must be able to create value, not just in one go but over the long run."
Having learned lessons from this adventure, the company will focus on generating organic growth through innovation - its "No.1 focus", Michel added.
By 2016, Imerys aims to reap 700 million euros ($964 million) a year in sales from newly launched, innovative products, up from 330 million last year and 200 million in 2011, the CEO said.
They include ceramic "proppants" used to keep hydraulic fractures open for shale gas exploration in the United States - where its second plant will ramp up production this year.
Other new products include graphite additives to make lithium-ion batteries, as well as talc additives that can make plastics resistant enough to be used more widely in cars, making vehicles lighter and more fuel-efficient, Michel said.
"NO SHOPPING LIST"
Imerys also supplies clay roof tiles used in construction and minerals that make industrial tools more resistant to shocks and heat, as well as additives that make paper white and glossy.
The company generates nearly half of its revenue in Western Europe, a quarter in emerging markets and the rest in the United States, Japan and Australia.
It is looking to strengthen its existing portfolio of about 30 minerals - from kaolin for paper to mica for paints - mainly through acquisitions but also through research and development. But Michel wouldn't say which minerals he was interested in.
"I wouldn't want to give the impression that I'm making a shopping list and revealing what could be of interest to us tomorrow," he said. "Also, it doesn't always come announced ... Who would have bet six months ago that Amcol was on the table?"
He stressed that while Imerys would keep looking out for possible acquisitions, investors should not expect that the sum it was ready to invest in Amcol would necessarily be available for other deals.
"If and when there an acquisition opportunity comes up, we will look at it, and if it makes sense industrially and strategically, we will seize it, of course," Michel said.
"But it's not because we'd committed to the Amcol deal that I feel some kind of pressing need to make two, three deals in the coming months."
After repeated offers and counter-offers, Imerys found that the price needed to secure Amcol would have been too costly for Imerys to meet its target of a pre-tax rate of return on capital employed (ROCE) of 15 percent, Michel said.
The missed opportunity is not all bad news, he added, noting that Imerys had shown it could be very reactive and ambitious, drawing up a substantial offer in just six weeks.
Michel said the first quarter of 2014 was confirming a trend seen at the end of last year - a dynamic U.S. recovery and stabilisation in Europe: "The panorama hasn't really changed, it's just less unfavourable than the past 12 months."
($1 = 0.7258 euros)
(Editing by Pravin Char)