Metallgesellschaft AG was formerly one of
Germany's largest industrial conglomerates based in
Frankfurt. 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
Financial services are the Service (economics), 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, acco ...
, and
engineering (
Lurgi).
Henry Merton & Company, Ltd was previously a branch of the Metallgesellschaft.
History
Metallgesellschaft AG was incorporated in
Frankfurt am Main 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 Universit ...
, his father Ralph Merton, and Leo Ellinger.
Merton was responsible for business strategy, Ellinger for operations, and a cousin of Merton,
Zachary Hochschild
Zachary Hochschild (May 16, 1854 – November 6, 1912) was a German businessman, metal trader, and co-founder of ''Metallgesellschaft AG''.
Biography
Hochschild was born to a Jewish family, the son of Justina (née Bendheim) and Koppel Jakob ...
, for marketing and international activities.
Their main competition were the two other large metal trading companies of Germany: ''
Aron Hirsch & Sohn
Aron Hirsch (6 February 1858 – 22 February 1942) was a German metal trader.
Biography
Hirsch was born to a Jewish family on 6 February 1858 in Halberstadt, Germany. In 1877, he joined the family business, metal trading company ''Aron Hirsch & ...
'' in
Halberstadt, and ''Beer, Sondheimer & Co'' in
Frankfurt am Main.
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, 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
Zachary Hochschild (May 16, 1854 – November 6, 1912) was a German businessman, metal trader, and co-founder of ''Metallgesellschaft AG''.
Biography
Hochschild was born to a Jewish family, the son of Justina (née Bendheim) and Koppel Jakob ...
, 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 Un ...
case (based on the tax treatment of dividends) that was heard at the same time as
Hoechst Hoechst, Hochst, or Höchst may refer to:
* Hoechst AG, a former German life-sciences company
* Hoechst stain, one of a family of fluorescent DNA-binding compounds
* Höchst (Frankfurt am Main), a city district of Frankfurt am Main, Germany
** Fra ...
.
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
{{Germany-company-stub