Banks moved swiftly yesterday to put up for sale the UK operations of Adolf Merckle, the German billionaire who committed suicide on Monday night amid the collapse of his empire.

Phoenix Group, owner of the third-largest drugs distribution business in Britain and the 500-store Rowlands pharmacy chain, will go on sale with an estimated value of up to €6 billion (£5.4 billion). The sale is one of several conditions demanded by the creditors of the late German industrialist in return for a €400 million bridging loan to keep his holding company afloat. He owned a controlling stake in VEM Vermögensverwaltung, Phoenix's holding company.

Ludwig Merckle, one of Adolf's sons, will also step down from his role as co-head of VEM as a condition of the bridging loan deal, under which the banks have agreed not to call in any loans until at least the end of March.

However, The Times has learnt that Merckle's holding company has already agreed with its creditors to sell its controlling interest in Phoenix this year.

Phoenix, which has its headquarters in Mannheim, Germany, employs about 22,000 people across Europe and has an annual turnover of about €22 billion. The company has about 6,500 staff in Britain, where its head office is in Runcorn, Cheshire, and its annual sales are about £1.2 billion.

VEM will first sell Ratiopharm, the German generic drugs company, as part of its deal with the banks, which include Royal Bank of Scotland, Deutsche Bank and Commerzbank.

The group also owns Hanson, the British building supplies business, but it was unclear last night whether any decision had been taken on its future. VEM said that it had no plans to sell any of its other businesses until KPMG, the auditor, had completed a three-month review of the group.

The sales of Ratiopharm and Phoenix would give VEM some much-needed cash. A loss that exceeded €200 million on a bad beton Volkswagen shares, the credit crunch and heavy debts have brought the group to the brink of collapse.

Phoenix controls about 15 per cent of the British drugs distribution market. The sector leader is AAH Pharmaceuticals, owned by Celesio, of Germany, with a share of about 40 per cent. Unichem, owned by Alliance Boots, has a share of about 38 per cent.

Phoenix is one of nine so-called full-line wholesalers in the UK, which deliver to hospitals, pharmacies and dispensing doctors. It has 14 depots in Britain, some of which stock about 26,000 medicines.

Analysts identified McKesson Corporation and Cardinal Health, America's biggest and second-biggest drug distributors respectively, as potential buyers of Phoenix.

Based on the ratio between these companies' share prices and their latest annual sales, Phoenix could fetch about €3 billion. However, the shares of both companies are well off their highest price of the past 12 months, at which point their values would translate into a sale price for Phoenix of as much as €6 billion.

VEM, Phoenix and Royal Bank of Scotland declined to comment on any possible sale of Phoenix.

Merckle, who also owned about 80 per cent of HeidelbergCement through VEM and other family holdings, had an estimated fortune of $9.2 billion last year, according to Forbes magazine. That made him the 94th-richest man in the world and the fifth-wealthiest in Germany.

The other UK businesses he owned through HeidelbergCement include Castle Cement, SRM, a recycling company, and Minerals Resource Management, which recycles inorganic materials into the cement industry.

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