Germany's Thyssenkrupp will split its sprawling industrial operations into two separate companies, the Essen-based company announced on Thursday.
Having taken over the reins at Thyssenkrupp after a dramatic dual resignation of ex-CEO Heinrich Hiesinger and board chairman Ulrich Lehner only three months earlier, interim CEO Guido Kerkhoff hereby gave in to growing calls from investors for a break-up of the ailing German industrial conglomerate to improve its profitability.
The two resulting companies will both still be based in Essen but will operate as independent entities. Kerkhoff further said that each firm will be publicly-listed, with corresponding plans scheduled for presentation to the supervisory board over the course of the weekend.
If approved, Thyssenkrupp's raw material trading- and naval shipbuilding activities, as well as its 50 percent share of a new steel joint venture with rival Indian Tata, would henceforth be concentrated in a stand-alone "Thyssenkrupp Materials AG". The remaining elevator construction and maintenance and automotive industry supply activities of the corporation would be retained in a second "Thyssenkrupp Industrials AG".
Kerkhoff expressed confidence that he would receive the go-ahead from his supervisory board for the plans shortly. However, a final decision on the matter also requires the approval of Thyssenkrupp investors at its upcoming annual general meeting (AGM) which will take place at some point between the next 12 and 18 months.
The Krupp Foundation, the single largest investor in Thyssenkrupp which was established by one of its founding fathers, signaled its support for the split on Friday which it said would ensure the sustainable competitiveness of the corporation and protect jobs.
Similarly, Swedish Cevian Capital, Thyssenkrupp's second largest shareholder and most vocal advocate for its corporate break-up in past years, told press that it "fully welcomes the decision" as a means to finally overcome the industrial conglomerate's long-standing problems.
Investors at the Frankfurt Stock Exchange welcomed the news enthusiastically, with Thyssenkrupp's share pricing rising by more than 10 percent in early Friday trading. Labor representatives have greeted the looming corporate split with more caution, calling for an auditor to assess the financial sustainability of the two spin-off companies.
Thyssenkrupp was originally formed in a merger of the German Thyssen and Krupp industrial conglomerates in 1999 and currently operates across five major divisions spanning automotive components, elevators, steel, materials services and industrial solutions.
Having taken over the reins at Thyssenkrupp after a dramatic dual resignation of ex-CEO Heinrich Hiesinger and board chairman Ulrich Lehner only three months earlier, interim CEO Guido Kerkhoff hereby gave in to growing calls from investors for a break-up of the ailing German industrial conglomerate to improve its profitability.
The two resulting companies will both still be based in Essen but will operate as independent entities. Kerkhoff further said that each firm will be publicly-listed, with corresponding plans scheduled for presentation to the supervisory board over the course of the weekend.
If approved, Thyssenkrupp's raw material trading- and naval shipbuilding activities, as well as its 50 percent share of a new steel joint venture with rival Indian Tata, would henceforth be concentrated in a stand-alone "Thyssenkrupp Materials AG". The remaining elevator construction and maintenance and automotive industry supply activities of the corporation would be retained in a second "Thyssenkrupp Industrials AG".
Kerkhoff expressed confidence that he would receive the go-ahead from his supervisory board for the plans shortly. However, a final decision on the matter also requires the approval of Thyssenkrupp investors at its upcoming annual general meeting (AGM) which will take place at some point between the next 12 and 18 months.
The Krupp Foundation, the single largest investor in Thyssenkrupp which was established by one of its founding fathers, signaled its support for the split on Friday which it said would ensure the sustainable competitiveness of the corporation and protect jobs.
Similarly, Swedish Cevian Capital, Thyssenkrupp's second largest shareholder and most vocal advocate for its corporate break-up in past years, told press that it "fully welcomes the decision" as a means to finally overcome the industrial conglomerate's long-standing problems.
Investors at the Frankfurt Stock Exchange welcomed the news enthusiastically, with Thyssenkrupp's share pricing rising by more than 10 percent in early Friday trading. Labor representatives have greeted the looming corporate split with more caution, calling for an auditor to assess the financial sustainability of the two spin-off companies.
Thyssenkrupp was originally formed in a merger of the German Thyssen and Krupp industrial conglomerates in 1999 and currently operates across five major divisions spanning automotive components, elevators, steel, materials services and industrial solutions.
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