In the early 19th century, the scientific
community took particular interest in
the extraction of alkaloids, highly
effective plant constituents with a
medicinal action. Quinine, depicted
here, was one such alkaloid.
It all started with a pharmacy in 1668. The Angel Pharmacy, which is still owned by members of the Merck family today, is where Merck originated. Like his contemporaries, the pharmacist Friedrich Jacob Merck prepared all medicinal substances himself. At that time, the “art of pharmacy” was still a manual craft.
In 1816 – several generations of pharmacists later – Emanuel Merck took over his father’s pharmacy and initiated the move from a manual craft to industrial production in 1827. In his laboratory, he succeeded in extracting alkaloids, a class of highly effective plant constituents whose medicinal effect attracted interest from the scientific community. By 1860, the company already offered more than 800 organic and inorganic substances for sale, including many still used in laboratories today.
The roots of the Liquid Crystals business – one of the outstanding Merck success stories – date back to 1904. For decades, liquid crystals remained a laboratory oddity, and their sale was handled by the Laboratory business.
Serono, which was acquired by Merck in 2007, also started out by extracting active substances. In 1906, Cesare Serono founded the “Istituto Farmacologico Serono” in Rome and developed a new method of extracting lecithin from egg yolk. In 1949, the company discovered a way to successfully isolate pure gonadotropin from urine. Gonadotropin plays an important role in reproduction. The production of recombinant gonadotropin transformed Serono into a biotechnology company.
Becoming a global, publicly listed company
Initial business relationships with European neighbors were established in the 1820s. Since 1900, Merck has had business relationships on all continents.
In the United States, Georg (later on “George“) Merck, a grandson of Emanuel Merck, founded a trading company called Merck & Co. in 1891. As a result of World War I, Merck in Darmstadt lost its entire stake in this company under the “Trading with the Enemy Act” of 1917. George Merck succeeded in reacquiring his interest and became president of the public company Merck & Co. Today, the two companies are no longer linked to one another. The U.S. company Merck & Co. owns the rights to the name within North America, while Merck in Darmstadt holds the rights in the rest of the world. In the United States and Canada, the company operates under the name EMD, the abbreviation for Emanuel Merck, Darmstadt.
Acquisitions and divestments have always played an important role at Merck. A decisive step in Merck’s expansion was the acquisition of a 50% interest in the Bracco Group of Italy in 1972. Aside from commercializing contrast agents and its own pharmaceutical specialties, Bracco served as Merck’s representative in Italy for the entire Merck product range, helping to significantly boost Merck’s earning power.
In 1991, Merck acquired Société Lyonnaise Industrielle Pharmaceutique (Lipha), which employed around 2,700 people and generated sales of DM 723 million. In the mid-1990s, Merck expanded its consumer health care business by acquiring Seven Seas in the United Kingdom and Monot in France. At the same time, with the acquisition of Amerpharm of the United Kingdom, Merck achieved a critical mass in the generic drugs business. The takeover of a large number of laboratory distribution businesses was rounded off by the purchase of VWR Scientific Products, a U.S. laboratory distributor, in 1999.
In order to secure the financing of these acquisitions, Merck went public in 1995. A 26% interest in Merck KGaA was sold to shareholders. Thereafter, the Merck family held the remaining 74% via the general partner E. Merck. Following a capital increase in 2007, ownership shifted slightly to its current 30:70 ratio.
The first half of the decade just ended saw a significant number of disposals and divestments. In 2000, Merck divested its interests in Bracco and vitamin chemicals. In 2004, the company exited from the laboratory distribution and electronic chemicals businesses. In 2006, Merck was debt-free. In 2007, Merck succeeded with the transformational acquisition of Serono. Involving a purchase price of € 10.3 billion, this was by far the largest acquisition ever made by Merck. As the generics business was sold in the same year for € 4.9 billion, the company lowered its debt to less than € 1 billion by year-end.
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