Adolf Merckle, the owner of the privately held Ratiopharm, one of the worlds largest generics manufacturers, has gotten himself into a whole world of trouble over his attempts to short-sell Volkswagen shares recently. His play backfired when Porsche saw through the attempts by certain hedgefunds to crash the stock and then purchased as much of the outstanding shares as possible sending the share price much higher.

Merckle’s losses are estimated to be anywhere between five hundred to one billion euros while the damage to VEM, the family’s asset management company which is itself linked to all of Merckle’s businesses including Ratiopharm, may have incurred debts of up to 5 billion Euro according to Spiegel Online.

While Ratiopharm has historically seen the private ownership by the Merckle family as a strength, it may now regret not having a diversified  shareholder base since Merckle’s creditor banks are now requesting the sale of Ratiopharm to cover the Merckle family debts. Ratiopharm is a very important generics player operating in 25 countries with over 5′000 employees so we’ll closely be following how this drama unfolds over the next months.