The Merck Group
The German Merck Group is a global pharmaceutical and chemical enterprise, the world’s oldest with roots in a mid-17th century apothecary in Darmstadt owned by Friedrich Jacob Merck. His descendant, Heinrich Emanuel Merck, took over the pharmacy in 1816 and began bulk manufacturing of pure alkaloids, offering them for sale to his pharmacy colleagues as well as to chemists and physicians.
Today the group is present in 60 countries, employing 32,800 people with total revenues of €7.6 billion and it is leader in segments as diverse as for example oncology, neurodegenerative diseases, liquid crystals and pigment coatings.
In 1995 the Merck family took the firm public as a partnership limited by shares (Merck KGaA) but retained an interest of about 70% via the group parent company E. Merck KG, which is wholly owned by the family. The German Merck family consists of 217 members, of which 126 equity-holding partners (shareholders) split amongst the 10th, 11th and 12th generation. The family enforces a strict separation of the spheres of influence and governance, between operating responsibility, which is currently mostly outside the family, and supervisory bodies that are entirely family-controlled. At Merck, being part of the operating business is no longer “in accordance with bloodline” but strictly merit based with a clear internal and external assessment process for high-potential family members to access senior management roles. Well-functioning interfaces for cross-checking and influencing the strategic decision making of the operating business exist via the Executive Board of E. Merck KG. A systematic continuing education process is preparing the younger members of the family to learn and experience the company structure and organization, become responsible shareholders and eventually join the operating business.
“Courage and pioneering spirit” are core family values that have been translated into successful innovation management and market leader positioning in specialty segments at Merck. By 2007 the company had strategically repositioned itself; with the acquisition of Serono, Merck transformed itself into one of the world’s leading biotech companies. It was a defining moment for the company and the family ; the fact that Jon Baumhauer (11th generation), Chairman of the Family Board, was able to approve the deal within 48 hours of a secret meeting with former Serono owners was a tribute to the strong family alignment behind the growth strategy.