FEW COMPANIES have a history as long and interesting as Merck. Founded in 1668 by Friedrich Jacob Merck as a pharmacy in Darmstadt, the world’s oldest apothecary has survived several European wars, two world wars and the Nazi regime. In 1917 America’s government confiscated its American subsidiary under the Trading with the Enemy Act. It has operated as a rival business, based in New Jersey but, confusingly, also named Merck, ever since.
Belén Garijo, the no-nonsense 60-year-old Spaniard who will take over as Merck’s chief executive on May 1st, says she is keenly aware of her company’s heritage and its unique ownership structure. Fully 70% of the company is still in the hands of the 13th generation of Mercks (the rest is owned by public investors). And it was at the family’s instigation that Stefan Oschmann, the outgoing CEO, and Ms Garijo, his deputy, transformed Merck through a series of bold acquisitions from a drugmaker living off legacy medicines into a conglomerate that makes gear and chemicals for biotechnology labs as well as pharmaceuticals. “Diversification is strength,” insists Ms Garijo, who herself embodies diversity, becoming only the second woman ever to head a firm in the DAX 30 index of Germany’s bluest chips.

Investors applauded the strategic shift under Mr Oschmann (see chart). Merck’s market value…
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