FRANKFURT (Reuters) - Chief Financial Officer Guido Kerkhoff was named interim CEO of Thyssenkrupp (TKAG.DE) on Friday and won the backing of the German industrial group’s biggest shareholder, as the search began for a permanent replacement for Heinrich Hiesinger.
Hiesinger quit last week after failing to win unanimous shareholder backing for a deal to create a steel venture with India’s Tata Steel (TISC.NS).
Kerkhoff, 50, will run the company until the process of finding a Hiesinger’s replacement is completed, Thyssenkrupp Chairman Ulrich Lehner said, adding that he enjoyed the “full confidence” of the supervisory board.
In a letter to the company’s 158,000 staff, Kerkhoff pledged continuity. “We will stick to our course of restructuring the company into a strong industrial group,” he wrote, promising to develop all business areas, including the steel venture.
Activist investors Cevian Capital, which holds an 18 percent stake in Thyssenkrupp, and Elliott have called for an across-the-board strategy review at the Essen-based conglomerate which makes everything from submarines to elevators.
They are at odds with the Alfried Krupp von Bohlen und Halbach Foundation, which owns a 21 percent stake and represents the legacy of the company’s late owner, whose last wish was for Thyssenkrupp to remain whole.
The Krupp foundation’s board met on Friday after facing criticism from labor leaders that it had let down Hiesinger by failing to back him in the wrangling over strategy that preceded his resignation.
The foundation expressed its regret over Hiesinger’s resignation and said it “stands by” the company and its workers.
The task now ahead was to implement the steel venture with Tata and develop other areas of the business. “The management board headed by Mr Kerkhoff enjoys our full confidence,” foundation chair Ursula Gather said in a statement.
The prime minister of North Rhine-Westphalia, the German state where Thyssenkrupp is based, Armin Laschet, is a member of the foundation’s board. On Thursday, Laschet backed Lehner in rejecting a possible breakup.
Thyssenkrupp shares traded down 1.2 percent, making them the second weakest stock in the 30-share DAX index .GDAXI.
Reporting by Douglas Busvine; Editing by Maria Sheahan, Jason Neely and Jane Merriman