IG Farben, (German: “Syndicate of Dyestuff-Industry Corporations”), world’s largest chemical concern, or cartel, from its founding in Germany in 1925 until its dissolution by the Allies after World War II. The IG (Interessengemeinschaft, “syndicate” or, literally, “community of interests”), partly patterned after earlier U.S. trusts, grew out of a complex merger of German manufacturers of chemicals, pharmaceuticals, and dyestuffs (Farben). The major members were the companies known today as BASF Aktiengesellschaft, Bayer AG, Hoechst Aktiengesellschaft, Agfa-Gevaert Group (Agfa merged with Gevaert, a Belgian company, in 1964), and Cassella AG (from 1970 a subsidiary of Hoechst).
The movement toward association had begun in 1904, with the merger of Hoechst and Cassella—a merger that immediately prompted a rival merger by BASF and Bayer, later joined by Agfa. (This latter group was called the Dreibund, or “Triple Confederation.”) In 1916, at the height of World War I, the rival groups joined forces and, with the addition of other firms, formed the Interessengemeinschaft der Deutschen Teerfarbenfabriken (“Syndicate of German Coal-Tar Dye Manufacturers”). This “little IG” was no more than a loose association: member companies remained independent, while dividing production and markets and sharing information. In 1925, after protracted legal and fiscal negotiations, the “big IG” was formed: assets of all constituent companies were merged, with all stock being exchanged for BASF shares; BASF, the holding company, changed its name to IG Farbenindustrie AG; headquarters were set up in Frankfurt; and central management was drawn from the executives of all constituent companies. (Cassella at first held out and was not absorbed by IG Farben until 1937.)
Policy-making was fused, but operations were decentralized. Regionally, production was split into five industrial zones—Upper Rhine, Middle Rhine, Lower Rhine, Middle Germany, and Berlin. In terms of vertical organization, the company’s production was split among three “technical” commissions, each governing a different range of products. Marketing was split among four sales commissions. In the course of the late 1920s and ’30s, IG Farben also became international, with trust arrangements and interests in major European countries, the United States, and elsewhere.
During World War II, IG Farben established a synthetic oil and rubber plant at Auschwitz in order to take advantage of slave labour; the company also conducted drug experiments on live inmates. After the war several company officials were convicted of war crimes (nine being found guilty of plunder and spoliation of property in occupied territory and four being found guilty of imposing slave labour and inhumane treatment on civilians and prisoners of war).
In 1945 IG Farben came under Allied authority; its industries (along with those of other German firms) were to be dismantled or dismembered with the stated intent “to render impossible any future threat to Germany’s neighbours or to world peace.” In the western zones of Germany, however, especially as the Cold War advanced, this disposition toward liquidation lessened. Eventually the Western powers and West Germans agreed to divide IG Farben into just three independent units: Hoechst, Bayer, and BASF (the first two being refounded in 1951; BASF in 1952).