German billionaire commits suicide after VW losses

By Sarah Marsh

FRANKFURT (Reuters) - In killing himself German billionaire Adolf Merckle has become the latest casualty of the global financial crisis, his family saying on Tuesday he was broken by the struggle to salvage their business empire.

Merckle, who was the world's 94th-richest person in 2008 according to Forbes magazine, spent his life building a business conglomerate with about 100,000 employees.

The empire was poised to come crashing down after his family made wrong-way bets on skyrocketing Volkswagen shares.

The family has been under pressure to sell some assets or seek bridging loans and has been in talks with banks for weeks.

"The desperate situation of his companies caused by the financial crisis, the uncertainties of the last few weeks and his powerlessness to act, have broken the passionate family entrepreneur and he took his own life," a family statement said.

The 74-year-old industrialist died when a train struck him late on Monday, said prosecutors in the southern German town of Ulm, near Merckle's home.

Little was publicly known about the father-of-four, who lived in the southwest German state of Baden-Wuerttemberg and was said to enjoy skiing and mountain-climbing.

He received the German Federal Cross of Merit in 2005 for his achievements in fostering economic growth in the state of Baden-Wuerttemberg.

Market players said Merckle liked to keep a low profile and had seemed like a conservative investor.

Yet he became the most well-known victim of a share market squeeze which briefly made carmaker Volkswagen the world's most valuable company late in October.

Its share price rocketed to just over 1,000 euros from 210 euros in two trading sessions after rival Porsche made a surprise stakeholding announcement that sent short sellers of VW shares running for cover.

"He had a reputation for being very, very prudent, very cautious -- a typical entrepreneur who always remained down-to-earth. So it was a huge surprise," said an analyst who asked not to be named.

At the time there was mostly speculation about banks and hedge funds that could have made heavy losses on VW. But banking sources told Reuters that Merckle's losses were estimated at 400 million euros ($539 million).

STRUGGLE TO SAVE EMPIRE

A lawyer by education, Merckle held talks on state guarantees with German regional government of Baden-Wuerttemberg, although he ultimately opted out of such backing and sought to seek bridging loans from banks.