Metallgesellschaft
| Company type | Aktiengesellschaft |
|---|---|
| Industry | Conglomerate |
| Predecessor | Schlesische AG für Bergbau und Zinkhüttenbetrieb Sachtleben Chemie  |
| Founded | 1881inFrankfurt am Main,Germany |
| Founder | Wilhelm Ralph Merton |
| Defunct | 2000 |
| Fate | Restructuring |
| Successor | GEA Group |
| Headquarters | , Germany |
| Services | Mining, specialty chemicals, commodity trading, financial services, engineering |
| Revenue | US$10 billion |
Number of employees | >20,000 |
| Subsidiaries | over 250 (notably: Lurgi Chemetall Henry Merton & Company) |
Metallgesellschaft AGwas formerly one ofGermany's largest industrial conglomerates based inFrankfurt.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(Chemetall),commodity trading,financial services,andengineering(Lurgi). Henry Merton & Company, Ltd was previously a branch of the Metallgesellschaft.[1]
History[edit]
Metallgesellschaft AG was incorporated inFrankfurt am Mainin 1881 byWilhelm Ralph Merton,his father Ralph Merton, and Leo Ellinger.[2]Merton was responsible for business strategy, Ellinger for operations, and a cousin of Merton,Zachary Hochschild,for marketing and international activities.[2]Their main competition were the two other large metal trading companies of Germany:Aron Hirsch & SohninHalberstadt,andBeer, Sondheimer & CoinFrankfurt am Main.[2]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.[2]In 1889, on the recommendation of chemistClemens Winkler,chemistCurt Nettoaccepted a post as head of the technical department.[3][4]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.[2]The company became more involved internationally as Europe became more reliant on imported metals.[2]In 1884, Metallgesellschaft sentBerthold Hochschild,brother ofZachary Hochschild,to the United States to establish an operation.[5]In 1887, theAmerican Metal Companywas incorporated as a joint stock company in New York with 51% Metallgesellschaft ownership so as to facilitate local decision-making; Metallgesellschaft executiveJacob Langelothwas named its president.[2]
Hedging debacle[edit]
In 1993, the company lost 1.3 billion dollars[6]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 keyEuropean Court of Justicecase (based on the tax treatment of dividends) that was heard at the same time asHoechst.
The company is now part ofGEA GroupAktiengesellschaft.
References[edit]
- ^Ernest Scott, Australia During the War 1914-18
- ^abcdefgJones, Geoffrey G.; Becker, Susan (February 2013).The Multinational Traders - Chapter 4 the German Metal Traders before 1914.ISBN9781134680016.
- ^Michel, Wolfgang (1984)."Curt Adolf Netto (1847–1909). Ein Deutscher im Japan der Meiji-Ära"(PDF).Jahresbericht der Japanisch-Deutschen Gesellschaft Westjapan(8). Fukuoka: Kyushu University Institutional Repository: 13–21. Archived fromthe original(PDF)on 2011-07-18.
- ^Däbritz, Walther (1931).Fünfzig Jahre Metallgesellschaft, 1881-1931: Denkschrift.pp. 72–84.
- ^Stack, Elizabeth.Immigrant Entrepreneurship: "German American Biographies:" Carl Morris Loeb "Retrieved December 21, 2017
- ^Jacque, Laurent L. (2010),Global Derivative Debacles: From Theory to Malpractice,Singapore: World Scientific,ISBN978-981-283-770-7.Chapter 6: Metallgesellschaft, pp. 73–96
External links[edit]
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