Adolf Merckle
Encyclopedia
Adolf Merckle was a businessman, and one of the richest people in Germany
.
Merckle was born in Dresden
, Germany
into a wealthy family. Most of his wealth came from inheritance
. He developed his Bohemian (i.e. Czech) grandfather's chemical wholesale company into Germany's largest pharmaceutical wholesaler, Phoenix Pharmahandel
. His family also owns the generic drug
manufacturer Ratiopharm
, and large parts of cement company HeidelbergCement
as well as vehicle manufacturer Kässbohrer
.
He was educated as a lawyer
but spent most of his time investing. He lived in Germany with his wife and four children.
Merckle made a speculative investment based on his belief that Volkswagen
shares would fall; however, in October 2008, Porsche SE's support of Volkswagen sent shares on the Xetra dax from €
210.85 to over €1000 in less than two days (a short squeeze), resulting in losses estimated in the hundreds of millions of dollars for Merckle.
In 2007, he was worth US$
12.8 billion by most estimates (Forbes), and by December 2008 he was worth $9.2 billion, a loss of $3.6 billion. In 2006, he was the world's 44th richest man, dropping to 96th place by December 2008, but still one of Germany's five richest men.
. More than any other single investment, Merckle’s poorly timed short-selling of Volkswagen shares caused the financial distress that led to his death. Believing that Porsche could not complete its takeover of Volkswagen and would have to sell its shares, Merckle and others bet against Volkswagen stock. But Porsche had quietly and effectively cornered Volkswagen stock, so short-sellers such as Merckle could not buy enough Volkswagen stock to cover their short positions. Volkswagen stock therefore quintupled in value in a single day, causing billions in losses for those who had bet against Volkswagen's share price. Faced with such losses, Merckle's cement company was unable to make payments on a huge loan taken out to purchase an English competitor, Hanson
.
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
.
Merckle was born in Dresden
Dresden
Dresden is the capital city of the Free State of Saxony in Germany. It is situated in a valley on the River Elbe, near the Czech border. The Dresden conurbation is part of the Saxon Triangle metropolitan area....
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
into a wealthy family. Most of his wealth came from inheritance
Inheritance
Inheritance is the practice of passing on property, titles, debts, rights and obligations upon the death of an individual. It has long played an important role in human societies...
. He developed his Bohemian (i.e. Czech) grandfather's chemical wholesale company into Germany's largest pharmaceutical wholesaler, Phoenix Pharmahandel
Phoenix Pharmahandel
PHOENIX Pharmahandel Aktiengesellschaft & Co KG , based in Mannheim, is the largest pharmaceutical wholesaler in Germany, and the second largest in Europe with about 20 distribution centers across the country delivering drugs to some 12,000 independent pharmacies...
. His family also owns the generic drug
Generic drug
A generic drug is a drug defined as "a drug product that is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use." It has also been defined as a term referring to any drug marketed under its...
manufacturer Ratiopharm
Ratiopharm
Ratiopharm is a German pharmaceutical company that is Europe's leading generics brand.Ratiopharm was owned by Adolf Merckle and makes generic Pharmaceuticals. They are based in Ulm, Germany and products being distributed in over 35 countries worldwide....
, and large parts of cement company HeidelbergCement
HeidelbergCement
HeidelbergCement is a German cement and building materials company. It is currently the world's third largest cement producer, the market leader in aggregates and fourth in ready-mix concrete. In 2010 the company produced around 78 million tonnes of cement...
as well as vehicle manufacturer Kässbohrer
Kässbohrer
Kässbohrer Fahrzeugwerke was a German vehicle manufacturer in Ulm. Its products were buses, coaches, vehicle transporters, trailers and special vehicles like snow groomer vehicles....
.
He was educated as a lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
but spent most of his time investing. He lived in Germany with his wife and four children.
Merckle made a speculative investment based on his belief that Volkswagen
Volkswagen
Volkswagen is a German automobile manufacturer and is the original and biggest-selling marque of the Volkswagen Group, which now also owns the Audi, Bentley, Bugatti, Lamborghini, SEAT, and Škoda marques and the truck manufacturer Scania.Volkswagen means "people's car" in German, where it is...
shares would fall; however, in October 2008, Porsche SE's support of Volkswagen sent shares on the Xetra dax from €
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
210.85 to over €1000 in less than two days (a short squeeze), resulting in losses estimated in the hundreds of millions of dollars for Merckle.
In 2007, he was worth US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
12.8 billion by most estimates (Forbes), and by December 2008 he was worth $9.2 billion, a loss of $3.6 billion. In 2006, he was the world's 44th richest man, dropping to 96th place by December 2008, but still one of Germany's five richest men.
Suicide
Adolf Merckle committed suicide on 5 January 2009 by throwing himself in front of a train near his hometown of BlaubeurenBlaubeuren
Blaubeuren is a town in the district of Alb-Donau near Ulm in Baden-Württemberg, Germany.It has 11.963 inhabitants as of December 2007.-Coat of arms:...
. More than any other single investment, Merckle’s poorly timed short-selling of Volkswagen shares caused the financial distress that led to his death. Believing that Porsche could not complete its takeover of Volkswagen and would have to sell its shares, Merckle and others bet against Volkswagen stock. But Porsche had quietly and effectively cornered Volkswagen stock, so short-sellers such as Merckle could not buy enough Volkswagen stock to cover their short positions. Volkswagen stock therefore quintupled in value in a single day, causing billions in losses for those who had bet against Volkswagen's share price. Faced with such losses, Merckle's cement company was unable to make payments on a huge loan taken out to purchase an English competitor, Hanson
Hanson plc
Hanson plc is a British based international building materials company, headquartered in Maidenhead. Traded on the London Stock Exchange and a constituent of the FTSE 100 Index for many years, the company was acquired by a division of German rival Heidelberg Cement in August 2007.-History:Hanson...
.