Less than a week after defending the deal to merge European steel assets with Tata Steel, Thyssenkrupp’s CEO Heinrich Hiesinger is to step down from his position after the company’s supervisory board accepted his resignation.
The company is to be led by the board until a suitable successor can be found, the company said on Friday. ”In this tough situation for the company, it is now initially about staying the course,” said chairman of the supervisory board, Dr. Ulrich Lehrer.
Mr. Hiesinger has led Thyssenkrupp, a large German industrial conglomerate, over the past seven years, attempting to reshape its focus away from steel, for which the merger with Tata Steel was seen as key. However, in recent weeks, the management’s unwillingness to push for more favourable terms because of recent tough quarters for Tata Steel’s European assets brought them criticism from leading activist shareholders.
Mr. Hiesinger defended the terms which included an agreement that in the event of an IPO, 55% of the proceeds would go to Thyssenkrupp. Also, Thyssenkrupp would determine the timeline for any IPO. Tata Steel had also insisted the agreement was structured appropriately — acknowledging changing circumstances while not changing the fundamental philosophy of the deal.
“Our point of view was that you can’t let two quarters decide the valuation of a company,” said Tata Steel MD T.V. Narendran told this paper.
“I take this step... to enable a fundamental discussion in the board on the future of Thyssenkrupp,” Mr. Hiesinger said on Thursday, as he asked for his resignation to be accepted.