The Supervisory Board of German steel major Thyssenkrupp today accepted the resignation of its CEO Heinrich Hiesinger in "mutual agreement" and reiterated its backing for a merger with Tata Steel.
It came just days after he joined Tata Steel Chairman N Chandrasekaran at a joint press conference in Brussels to welcome a "new steel champion in Europe" following an agreement on a joint venture with the Indian steel major.
In a statement after a board meeting today, Chairman of the Supervisory Board of Thyssenkrupp Ulrich Lehner said the company remained committed to the Indian joint venture, which is set to create Europe's second-largest steel-maker after Lakshmi N Mittal's Arcelor Mittal.
"In this tough situation for the company it is now initially about staying on course... This includes the realisation of the steel joint venture. For this we reached an important milestone with the signing," said Lehner, in reference to the definitive agreement signed with Tata last week.
He also praised Hiesinger's leadership of the German steel giant over the last seven years.
"He kept the company from its demise and changed it sustainably. During his time, he created the basis for Thyssenkrupp to exist as a strong industrial company in accordance with the principles of the foundation," Lehner said, adding that his decision to step down at this point "deserves our highest esteem and respect".
The company's Supervisory Board has asked the Board comprising Guido Kerkhoff, Oliver Burkhard and Donatus Kaufmann to lead without a Chief Executive Officer for the time being as the successor for Hiesinger will be appointed following a "structured process".
Hiesinger is seen as instrumental in achieving the 50-50 JV agreement with Tata Steel, which is set to create a mega steel company made up of 48,000 employees and sales worth 17 billion euros after all regulatory clearances.
In the event of a stock market flotation of the business in future, Thyssenkrupp would receive 55 per cent of the proceeds and would get to dictate the timing of any flotation.
However, according to reports, this deal did not satisfy all of the German firm's shareholders, some of whom believed Thyssenkrupp had got the poor end of the deal.
The merger has been widely welcomed by workers' unions in Britain as the best solution to ensure the long-term future of Tata Steel's UK operations.
The Indian company owns the UK's largest steelworks in Port Talbot, South Wales, employing thousands of staff.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)