Frankfurt: Thyssenkrupp AG’s supervisory board unanimously approved a plan on Sunday to split the company into two units, and named Bernhard Pellens as its chairman.
Under the restructuring, Thyssenkrupp Industrials will manage the elevator, automotive supplies and plant construction businesses while Thyssenkrupp Materials will run steel and metal-focused operations. The executive board had proposed the changes on Thursday.
Interim Chief Executive Officer Guido Kerkhoff, 50, was named permanent CEO and received a five-year contract. Pellens, 62, was elected to lead the supervisory board and replaces Ulrich Lehner, 72, who resigned in July.
“We can now finally give our employees a clear orientation for the future of the company," Kerkhoff said in the statement. “Our solution is responsible and equally serves the interests of employees, customers and shareholders."
For Thyssenkrupp, once an icon of German industrial might, the restructuring follows months of turmoil sparked by executive resignations, pressure from activist investors and losses at its industrial division. Shareholders including Cevian Capital have blamed a complicated business structure for the company’s weak performance. Labor unions were also pushing for change.
We’re “pleased we helped shape the new strategy and found a positive solution for all stakeholders," said Markus Grolms, secretary at labor union IG Metall and was interim chairman at Thyssenkrupp.
The spinoff must still be approved by shareholders.
Ursula Gather, chairwoman of Thyssenkrupp’s largest shareholder, the Krupp von Bohlen und Halbach-Stiftung foundation, called the plan a new direction for the company.
“This proposal possesses a convincing industrial logic," she said.
The separation would happen via a spinoff and give investors shares in both companies, which will trade on public exchanges, Thyssenkrupp said in a press release on Thursday.
(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)