The conglomerate run by German billionaire Adolf Merckle, who committed suicide two days ago, has secured a much-needed bridging loan from banks but has had to put up the generic drugmaker Ratiopharm up for sale in doing so.

Before he took his own life by jumping in front of a train, Mr Merckle and his family’s VEM investment group had been negotiating for weeks with a consortium of lenders in a bid to save the 120-firm business empire. The problems for the group principally stem from a bad bet last year on Volkswagen shares which reportedly cost the financier some 400 million euros, plus debts from its HeidelbergCement operation.

Now, a loan has been secured, thought to be in the region of 400 million euros. Ludwig Merckle, one of the billionaire’s four children and joint chief executive of VEM, said that “we are very happy to have found a solution." He added that “the operating business at Ratiopharm”, as well as other companies in which VEM holds a stake such as the drug wholesaler Phoenix, “is fundamentally healthy.”

The sale of Ratiopharm is a condition of the loan as is Mr Merckle’s departure as joint CEO. Around 30 banks were involved in the negotiations, including Commerzbank, Deutsche Bank and the Royal Bank of Scotland.

Ratiopharm is the world's fourth-largest generic drugs maker, posting sales in 2007 of $1.8 billion euros, and is sure to attract a lot of interest. Unsurprisingly, Israel’s Teva Pharmaceutical Industries is seen as a frontrunner to acquire the Berlin-based group.

However research-based pharmaceutical firms companies may also be taking a look at Ratiopharm’s businesses. Sanofi-Aventis recently bought Czech generics drugmaker Zentiva, while in August GlaxoSmithKline signed a deal with South Africa’s Aspen and its Indian joint venture partner Strides Arcolabs to sell branded generics in emerging markets.