Metallgesellschaft AG was formerly one of
Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwee ...
's largest industrial conglomerates based in
Frankfurt
Frankfurt, officially Frankfurt am Main (; Hessian: , " Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on it ...
. It had over 20,000 employees and revenues in excess of 10 billion US dollars. It had over 250 subsidiaries specializing in mining,
specialty chemicals
Speciality chemicals (also called specialties or effect chemicals) are particular chemical products which provide a wide variety of effects on which many other industry sectors rely. Some of the categories of speciality chemicals are adhesives, ag ...
(Chemetall),
commodity trading,
financial services
Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...
, and
engineering
Engineering is the use of scientific principles to design and build machines, structures, and other items, including bridges, tunnels, roads, vehicles, and buildings. The discipline of engineering encompasses a broad range of more speciali ...
(
Lurgi).
Henry Merton & Company, Ltd was previously a branch of the Metallgesellschaft.
History
Metallgesellschaft AG was incorporated in
Frankfurt am Main
Frankfurt, officially Frankfurt am Main (; Hessian: , " Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on it ...
in 1881 by
Wilhelm Ralph Merton
Wilhelm Ralph Merton (14 May 1848, in Frankfurt – 15 December 1916, in Berlin) was a prominent and influential German entrepreneur, social democrat, and philanthropist. Among his most notable accomplishments, he was a founder of the Univer ...
, his father Ralph Merton, and Leo Ellinger.
Merton was responsible for business strategy, Ellinger for operations, and a cousin of Merton,
Zachary Hochschild, for marketing and international activities.
Their main competition were the two other large metal trading companies of Germany: ''
Aron Hirsch & Sohn'' in
Halberstadt
Halberstadt ( Eastphalian: ''Halverstidde'') is a town in the German state of Saxony-Anhalt, the capital of Harz district. Located north of the Harz mountain range, it is known for its old town center that was greatly destroyed by Allied bomb ...
, and ''Beer, Sondheimer & Co'' in
Frankfurt am Main
Frankfurt, officially Frankfurt am Main (; Hessian: , " Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on it ...
.
Although Metallgesellschaft was a joint stock company, it was operated like a family business with key positions allocated to long-time loyal employees who were gradually rewarded with stock in the company.
In 1889, on the recommendation of chemist
Clemens Winkler
Clemens Alexander Winkler (December 26, 1838 – October 8, 1904) was a German chemist who discovered the element germanium in 1886, solidifying Dmitri Mendeleev's theory of periodicity.
Life
Winkler was born in 1838 in Freiberg, Kingdom ...
, chemist
Curt Netto accepted a post as head of the technical department.
Metallgesellschaft was more diversified than its two main competitors who traded solely in copper, lead, and zinc while Metallgesellschaft also traded aluminum, nickel, and pyrite.
The company became more involved internationally as Europe became more reliant on imported metals.
In 1884, Metallgesellschaft sent
Berthold Hochschild, brother of
Zachary Hochschild, to the United States to establish an operation.
[Stack, Elizabeth]
Immigrant Entrepreneurship: "German American Biographies: "Carl Morris Loeb"
Retrieved December 21, 2017 In 1887, the
American Metal Company was incorporated as a joint stock company in New York with 51% Metallgesellschaft ownership so as to facilitate local decision-making; Metallgesellschaft executive
Jacob Langeloth was named its president.
Hedging debacle
In 1993, the company lost 1.3 billion dollars
[. Chapter 6: Metallgesellschaft, pp. 73–96] suffering from flawed long hedge strategy in near term futures contracts that was meant to protect against forward sales commitments. A fall in spot prices forced margin calls for the company and the contracts were closed at a loss. Subsequently, the spot price increased and the company suffered even greater losses covering its customer commitments.
It is debated whether the company was speculating after unwinding the long futures hedge since they became essentially exposed or naked against their forward customer commitments. It also became involved in a key
European Court of Justice
The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European U ...
case (based on the tax treatment of dividends) that was heard at the same time as
Hoechst.
The company is now part of
GEA Group
GEA Group AG (Gesellschaft für Entstaubungsanlagen) is a German corporation, mostly active in the food and beverages sector, headquartered in Düsseldorf, Germany. The company is listed on the German MDAX.
History
The ancestor of today's GEA ...
Aktiengesellschaft.
References
External links
*
Manufacturing companies of Germany
Manufacturing companies based in Frankfurt
German companies established in 1881
German companies disestablished in 2000
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