(Reuters) - Minerals Technologies Inc (>> Minerals Technologies Inc) said it would buy Amcol International Corp (>> AMCOL International Corporation) for about $1.7 billion (£1.02 billion), after Paris-based Imerys SA (>> IMERYS) failed to match Minerals' sweetened bid of $45.75 per share.

Minerals' shares were up 4 percent at $56.61, while Amcol shares were down 2 percent at $45.66 in early trading on the New York Stock Exchange.

Minerals and Imerys have been locked in a bidding war since February for Amcol, which has large reserves of bentonite, a mineral used in the construction and energy industries.

Amcol had last week asked Imerys to match Minerals' offer.

Minerals on Monday said Amcol ended its merger agreement with Imerys' and paid the company's U.S. subsidiary a termination fee of $39 million.

The combined company would have more than $2 billion in sales, Joseph Muscari, chief executive of Minerals said in a statement.

Minerals, which produces calcium carbonate, used to whiten everything from paper to talc, said Amcol would immediately add to earnings once the deal closes, which is expected in the first half of this year.

Minerals said JP Morgan has committed to provide funding for a deal.

Cravath, Swaine & Moore LLP is legal counsel to Minerals and Lazard is the lead financial adviser. Kirkland & Ellis LLP is Amcol's legal counsel and Goldman, Sachs & Co is its exclusive financial adviser.

(Reporting By Sneha Banerjee in Bangalore; Editing by Saumyadeb Chakrabarty and Savio D'Souza)