The sale of Waterford Wedgwood, the crystal and ceramics maker, to an American private equity fund for an undisclosed sum is expected to be announced this morning, The Times has learnt.

Deloitte, the administrators, were in discussions with KPS Capital Partners last night, with negotiations expected to conclude at midnight. KPS has just bought Waterford’s American rival Lennox and is expected to merge the two companies. A spokesman for Deloitte declined to comment.

It is understood that KPS plans to keep production of high-quality goods, such as hand-painted figurines, in the UK, which could preserve hundreds of British jobs. However, low-end production is likely to move to Asia, causing some redundancies.

Waterford Wedgwood, which owns Waterford Crystal, Wedgwood, the British potter, the Royal Doulton fine china business and Rosenthal, the German porcelain maker, has 8,000 employees worldwide, including 1,900 in the UK.

Most of its British workers are based at its manufacturing operation at Barlaston, Stoke-on-Trent, and at retail stores. Nearly 370 workers in two UK subsidiaries have already lost their jobs.

The sale has been the subject of industrial unrest in the Irish Republic, where workers at the Waterford Crystal factory in Kilbarry, Co Waterford, staged a sit-in after Deloitte said that the plant would close until a buyer could be found, with the loss of 480 jobs.

Sir Anthony O’Reilly, the Irish media tycoon who is chief executive of Independent News & Media, and Peter Goulandris, his brother-in-law, are set to lose about €400 million (£360 million) as a result of the deal.

The company was financed through a combination of bank debt, with Bank of America as the main lending bank, and a public bond. It is believed that bondholders will not recover all their money.

Apart from his equity investment, Sir Anthony had also advanced Waterford Wedgwood several million more euros and could also lose that money.

A source close to the deal said that KPS and Deloitte were close to signing an American-style “binding agreement to sell” last night. Such an agreement means that the sale is all but complete, subject to a month’s due diligence, before final completion.

Waterford’s £6 million Minton collection of pottery is now likely to be sold or dispersed. There has been some pressure from members of the House of Lords for it to be bought for the nation.

Since the 250-year old ceramics maker collapsed into administration after missing a repayment deadline for its €449 million of debt on January 2, the sale process has been filled with drama.

KPS, which had been trying to buy the business before it went into administration, signed a “letter of intent” to buy it with Deloitte in January.

Irish trade unions objected to the original bid, saying that KPS was interested only in acquiring the brand name rather than in keeping jobs.

Clarion Capital, another American private equity firm, which was advised by John Foley, the former Waterford Crystal chief executive, entered the fray in late January.

Earlier this month, a consortium led by Thomas R. Wedgwood, a direct descendant of the pottery’s founder, Josiah Wedgwood, lodged a formal expression of interest in buying back the company. However, the KPS bid was first past the post.

Wedgwood, which was founded in the 18th century, is a byword for world standards in tableware design and manufacturing.

However, the company has had to endure tough times since it was bought by the Irish company Waterford Glass Group in 1986. Its potential customers have moved away from using formal dinner services, and cheaper alternatives have become available from Eastern Europe and Asia. Its sales to America have also been hit in recent years by the growing strength of the euro.

Six years of losses eventually forced the company to transfer the largest part of its ceramics production to the industrial outskirts of Jakarta, Indonesia.

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