History of Messer Group
In 2009 the Messer Group became 111 years old - and despite this was not a birthday with a zero at the end, we took the opportunity to offer our heartfelt thanks to our customers, partners and employees for their commitment and loyalty. Also in 2010 Messer was always active, e.g. by the start-up of six new air separation plants! You can obtain an overview of the Messer Group’s exciting history by selecting the year that interests you in our history, or by reading the extracts of the book "100 per cent Messer".
Adolf Messer’s first steps into international markets
Adolf Messer was born on 6 April 1878 in Hofheim/Taunus, the son of Johann Matthäus and Margarethe Messer. In 1898, aged 20 and still a mechanical engineering student, he set up a small workshop, which quickly led to his first successes with the construction of acetylene generators and lighting appliances. Even at this very early stage, Messer was looking beyond the German market. In the first seven years following the founding of the company, approximately 300 installations were exported.
Since acetylene lighting installations were increasingly suffering from the competition from gas lights and electrically powered lighting systems and, moreover, the demand for acetylene for cooking and heating was decreasing, Adolf Messer was quickly forced to change his product range: he took up autogenous welding and exported his first air separation units before the First World War. The expansion of the company was reflected above all in the establishment of branches and subsidiaries both at home and abroad, which became an important mainstay of the company. The outbreak of World War One in 1914 put a temporary stop to the company’s international expansion. After 1918, in the difficult economic conditions of the post-war era, Adolf Messer put a lot of energy into regaining the export markets after the company assets in Great Britain and the USA had been seized and auctioned off. In the 1920s, the company once again built up its contacts with foreign customers and consolidated its domestic market position in the cutting and welding sector, since the production facilities had survived the First World War almost unscathed.
Even though Messer succeeded in continuously diversifying and modernising its product range, the company was not spared the effects of the Great Depression of 1929 – 1932/33. The global economic collapse led to a dramatic crash in industrial production. Sharply declining sales and job losses also characterised Messer’s day-to-day business from the late 1920s onward.
After the collapse of the Weimar Republic in 1933, the Frankfurt-based company was operating in a macroeconomic environment that was increasingly recovering from the severe economic crisis. German industry had already come through the worst of the recession by the spring of 1933, from which point it benefited from the global economic upturn as well as the armaments and employment programmes pushed through by the NS regime. At Messer & Co. GmbH, as at other companies, the day-to-day business was increasingly overshadowed by the forced military build-up, resulting in, for example, several orders from the German Army Ordnance Department for the construction of special machinery. Thus, electrical welding equipment from Messer was used for joining tank walls, for improving resistance welding technology in order to achieve gas-tight seals on pressure hulls and hollow bodies, or for developing the Nivosec curved-space oxygen cutting machine, which made it possible to carry out three-dimensional work on pressed armoured cupolas for armoured vehicles. The company was also involved in the research into the construction of missiles, which the army tested from 1936, and delivered four large-scale installations for the production of liquid oxygen to the army testing facility at Peenemünde. With the advance of the Allies in the final weeks of the war, all of Messer’s production facilities gradually came to a standstill in the spring of 1945. The three years or so between the end of the war on 8 May 1945 and the currency reform were characterised by improvisation in every area. In terms of the company’s development in the post-war period, it was an invaluable advantage that relations with long-standing foreign business partners could be quickly re-established on a basis of mutual trust in spite of the devastation caused by the NS state’s aggressive foreign policy. In April 1946, for example, Adolf Messer had invited Raoul Amédéo to visit, followed shortly afterwards by his sons Pierre and Jean, in order to revive their collaboration through the formation of the Société Française des Appareils et Procédés Messer. Before Adolf Messer succumbed to a serious illness on 13 May 1954, he had ensured that the company would remain in family ownership: one year before his death at the age of 74, he had decided to transfer the responsibility for the overall running of the company to his son, Hans.
On the way to a global enterprise – The era Hans Messer (1953–1993)
With the still young Hans Messer at the helm of the company, who had succeeded his father, Adolf, as Managing Director at the age of 28, Adolf Messer GmbH shared in the economic boom of the 1950s.
Messer’s growth in the early years of the Federal Republic was not, however, solely due to the business it conducted with the key industries of the “economic miracle” (iron and steel and shipbuilding industries etc.), but also to the formation of numerous subsidiaries and joint ventures abroad. After the company’s growth hit internal limits in the early 1960s, Adolf Messer GmbH merged with parts of Knapsack-Griesheim AG, which was part of the Hoechst AG group of companies, to form Messer Griesheim GmbH in 1965.
The merger meant a certain loss of corporate power for the family, at least on paper, since the ownership structure of the company had fundamentally changed: 66 2/3 percent of the initial share capital of 30 million deutschmarks was now held by Hoechst while 33 1/3 percent was held by the Messer family through Messer Industrie GmbH.
Although the merged company started life as part of a large corporate group, the family was able to secure its long-term influence on the history of Messer Griesheim through the basic agreement between Hans Messer and Hoechst AG. As agreed beforehand between Messer and Karl Winnacker, the permanent presence of the family on the executive committees was laid down. The executive board was to consist of “at least three, and no more than four people. The Messer family is entitled to nominate one executive director, as long as its stake does not fall below ten percent, while Hoechst is entitled to nominate two executive directors.” It goes on to say: “Each party will comply with the nomination of the other party for the appointment of the executive directors unless there is an important reason that stands in the way of a particular appointment.”
Hans Messer was appointed as the first CEO, “if he himself wishes this”. Moreover, both parties agreed to constitute a shareholders’ committee, “on which Hoechst and the Messer family will each have two members” and which “is supposed to be authorised to give instructions, in particular with regard to the executive board”. Finally, the agreement in principle stipulated company policy decisions which require “a 75% majority”. These included a “change in the purpose of the company”, the “taking out of larger loans” or the “appointment and dismissal of executive directors”. There were also various agreements within the family to ensure that the family’s influence on the operational business was not put at risk. For example, Hans and Ria Messer decided to sign an agreement with their children which obligated every family member only to exercise their voting rights collectively in future. The agreement of June 29, 1979, which designated Hans Messer as the person with the deciding/ casting vote//sole voting member, was also supported by the family of Erika Heberer (daughter of the company founder Adolf Messer) as well as the Adolf Messer Foundation. In short: despite a shareholding of “only” around 33%, the family definitely exerted a 100% influence on company policy.
In the second decade after its formation, it quickly became clear that Messer Griesheim GmbH had been successful in forming potential synergies which were now exploited to the full. In the wake of a general economic recovery phase lasting several years, there was continuous growth in worldwide sales after 1975, passing the magic figure of one billion deutschmarks for the first time in 1978, and reaching over DM 1.7bn, almost double what it had been ten years before, in 1984, which was Messer Griesheim’s most successful financial year up to that point. The industrial gases business remained the real engine of growth, accounting for around 70% of total turnover between 1975 and 1989. The company particularly benefited from the fact that, in addition to its traditional customers in the steel, shipbuilding, automotive and chemical industries, it also succeeded in developing new applications for compressed and liquefied gases, gas mixtures and speciality gases thanks to intensive research work, leading to business partnerships in new growth sectors.
After the rusting away of the “Iron Curtain” in Eastern Europe, Messer Griesheim was also able to take advantage of the new opportunities opening up in the emerging markets of the former Socialist countries, before an era in the history of Messer Griesheim came to an end in the spring of 1993. After 40 years of service as CEO, Hans Messer retired from the company’s operational business at the age of 68, in accordance with the agreement with Hoechst AG. However, the company continued to benefit from his experience and expertise in different capacities as he served on the Shareholders’ Committee and the Supervisory Board until his death in 1997.
Crises, turbulence, change – from global player to “100 per cent Messer” (1993–2004/5)
Following Hans Messer’s retirement from senior management, both the long-standing harmonious arrangement between Messer Industrie GmbH and Hoechst AG and the family’s position in the company came under severe threat from several directions as the 1990s progressed.
In 1993, Hans Messer passed the responsibility for running the company to Herbert Rudolf, a family outsider who had a good track record in managing Messer’s USA subsidiary.
Under Herbert Rudolf’s leadership, Messer Griesheim embarked on an aggressive course of globalization which was ultimately to end in failure. The numerous and, in some cases, highly speculative acquisitions and start-ups of foreign companies and subsidiaries led to a massive deficit which, just before the millennium, would provoke the dismissal of Herbert Rudolf and a sharp correction in the company’s overall policy. But that wasn’t all: following Hans Messer’s departure, practices that had long been regarded as fundamental in the development of the company were now called into question by the new man in charge. It was Herbert Rudolf’s clear intention to eradicate family influence on the running of the company altogether.
Debts and passiveness
During the 1990s, the business policies of Messer Griesheim became closely linked to the strategic goals of the Hoechst Group. From 1994 onwards, Hoechst’s prime focus was on their core businesses of pharmaceuticals, agrochemicals and industrial chemicals and they were now keen to divest themselves of their two-thirds majority share in Messer Griesheim. There followed many years of debate about the future ownership structure of the Messer Griesheim Group and a remarkably passive attitude on the part of the Hoechst board towards the spiralling Messer deficit. Early warnings emanating from the Messer family about the imminent collapse of the company were brushed aside and Herbert Rudolf was given virtual carte blanche.
After the stock market flotation failed and the much touted sale to Linde AG fell through at the last minute because of complications arising from anti-trust legislation, the Hoechst/Aventis shares in Messer Griesheim were finally transferred to the financial investment companies Goldman Sachs and Allianz Capital Partners in April 2001. They also took on two thirds of the net deficit which by spring 2001 had reached the not inconsiderable figure of 1.72 billion euros.
Resignation and investment
However, disputes within the family were also endangering the continued existence of the company. For example, Thomas Messer, the eldest son of Hans Messer, declined to take “any further responsibility for the maintenance and development of the family business” as he wished to chart his own future. In December 1996, Thomas Messer resigned from Messer Industrie GmbH and gave away the greater part of his MIG shares to the charitable Adolf Messer Foundation.
When, in the second half of the 1990s, the fate of Messer Griesheim was hanging in the balance, Stefan Messer – second son of Hans Messer, who died in 1997 – made his view quite clear that the family should retain their long-term influence over the company. In 1999, he purchased the Messer Cutting & Welding subsidiary from Messer Griesheim GmbH on behalf of the family.
One year later, under the direction of American financial investors Carlyle, the company’s Cutting and Welding division merged with the Swiss company Castolin Eutectic to form the Messer Eutectic Castolin Group – a new company with the Messer family holding 36 per cent of the shares.
Restructuring and a new beginning
At Messer Griesheim, where control of the far bigger industrial gases side of the business still lay, the financial investors’ prime focus after 2000 was on restructuring and debt relief. Messer Griesheim divested itself of a number of its holdings, concentrated on certain core regions and successfully completed its “slimming down” process. When discussions about the future of Messer resurfaced after autumn 2003, one section of the family led by Stefan Messer resolved to take responsibility for the company back into their own hands (much to the surprise of the financial investors). They withdrew from operations in Germany, the USA and the UK and acquired the shares held by Goldman Sachs and Allianz Capital Partners.
Since May 2004, the former Messer Griesheim Group has once again become an owner-managed industrial gases company operating under the name of Messer Group. Finally, in early 2005, Stefan Messer also bought out financial investor Carlyle’s holding in the Messer Eutectic Castolin Group, thus restoring to family control what his grandfather Adolf Messer had founded more than a century earlier and what his father Hans Messer had built up after the Second World War – a company with a global reach operating in the industrial gases and cutting & welding technology sectors.
Dr. Jörg Lesczenski, Author of “100 per cent Messer“