Metallgesellschaft

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Metallgesellschaft AG
Company type
Lurgi

Chemetall
Henry Merton & Company)

Metallgesellschaft AG was formerly one of

Lurgi
). Henry Merton & Company, Ltd was previously a branch of the Metallgesellschaft.[1]

Share of the Metallgesellschaft AG, issued 21 February 1933

History

Metallgesellschaft AG was incorporated in

Frankfurt 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 chemist Clemens Winkler, chemist Curt Netto accepted 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 sent Berthold Hochschild, brother of Zachary Hochschild, to the United States to establish an operation.[5] 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.[2]

Hedging debacle

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 key European Court of Justice 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 Aktiengesellschaft.

References

  1. ^ Ernest Scott, Australia During the War 1914-18
  2. ^
    ISBN 9781134680016
    .
  3. ^ 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 from the original (PDF) on 2011-07-18.
  4. ^ Däbritz, Walther (1931). Fünfzig Jahre Metallgesellschaft, 1881-1931: Denkschrift. pp. 72–84.
  5. ^ Stack, Elizabeth. Immigrant Entrepreneurship: "German American Biographies: "Carl Morris Loeb" Retrieved December 21, 2017
  6. ISBN 978-981-283-770-7
    . Chapter 6: Metallgesellschaft, pp. 73–96

External links


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