The maker of generic medication will be sold off as part of a restructuring deal to pay off bad investments in carmaker Volkswagen and the impact of global financial crisis, Merckle’s investment vehicle VEM said on Wednesday.
“To create a sustainable financial structure for the group, the Merckle family and banks reached an agreement to sell the generics maker,” VEM said said in a statement.
Merckle, one of Germany’s richest men, brought his corporate empire to the brink of ruin late last year as he short-sold shares of VW just as Porsche announced it held far more of the carmaker than was believed. The panic sparked by Porsche’s announcement made VW temporarily one of the world’s most expensive companies and cost Merckle hundreds of millions of euros.
The industrialist then began negotiations with as many as 30 banks on a rescue plan that includes a €400 million bridge loan to keep his companies solvent. In addition to Ratiopharm, Merckle’s family owns drug distributor Phoenix Pharmahandel and nearly 90 percent of HeidelbergCement.
Ratiopharm is Germany’s biggest and most well-known generic drugmaker and has been valued at as much as €6 billion. The company had sales of €1.8 billion in 2007 and employs 5,400 worldwide. It was a popular target of speculation several years ago during a round of consolidation among Europe’s generic drugmakers.
Merckle committed suicide by stepping in front of a train near his home outside of Ulm on Monday. According to Forbes magazine, he had a total net worth last March of $9.2 billion (€6.9 billion).
“The plight of his firms caused by the financial crisis, the uncertainties of recent weeks as well as the powerlessness of not being able to do anything, broke this passionate family businessman,” the Merckle family said in a statement released on Monday.