FILE PHOTO: Thyssenkrupp’s logo is seen close to the elevator test tower in Rottweil, Germany, September 25, 2017. REUTERS/Michaela Rehle/File Photo
July 17, 2018
FRANKFURT (Reuters) – Thyssenkrupp <TKAG.DE> shares were indicated 3.4 percent higher early on Tuesday as analysts expect a deeper restructuring of the German submarines-to-elevators conglomerate after the resignation of its chairman.
Ulrich Lehner resigned on Monday saying he was no longer able to safeguard the interests of employees and shareholders, deepening a leadership crisis after Chief Executive Heinrich Hiesinger resigned earlier this month. [nL8N1U91S5]
“A sharply worded resignation announcement from Dr. Lehner makes clear that aggressive restructuring may be in the cards, supporting our 33 euros sum of the parts based price target,” Jefferies analyst Seth Rosenfeld said in a note late on Monday.
“It is clear that Thyssenkrupp is at a crossroads.”
Thyssenkrupp shares closed at 20.60 euros on Monday.
Lehner, 72, said in a statement he no longer enjoyed sufficient support to develop the company in the interest of its customers, employees and shareholders and would leave at the end of July.
“I take this step consciously to enable a fundamental discussion with our shareholders on the future of Thyssenkrupp,” Lehner said.
“A break-up of the company and the related loss of many jobs is not an option.”
Hiesinger and Lehner had championed a European merger of Thyssenkrupp’s steel interests with those of India’s Tata Steel <TISC.NS>, sealed on June 30. [nL8N1TV6BY]
But activist shareholders have demanded deeper restructuring steps to raise the performance of its various businesses.
Hiesinger embarked on a restructuring push, merging the company’s European steel operations together with rival Tata, but failed to win unanimous backing from some Thyssenkrupp shareholders.
Thyssenkrupp installed Guido Kerkhoff as acting chief executive but Hiesinger’s departure opens up more fundamental questions about a company that was long run not only for profit, but also with the aims of upholding the legacy of its founding family and preserving jobs for its 158,000 workers.
Thyssenkrupp’s materials trading business is widely seen as a potential candidate for a sale, joint venture or listing.
But activists have called for more radical steps.
Thyssenkrupp has, however, insisted that some divisions such as elevators are a core part of the company.
“I respect Lehner’s decision, but I regret it,” Wilhelm Segerath, head of the Thyssenkrupp works council and a senior official in the IG Metall industrial trade union, said in a statement.
Workers command half of the seats on Thyssenkrupp’s supervisory board. Together with Krupp foundation, workers have the power to block deeper restructuring moves.
Segerath called on the main shareholders to work together to develop Thyssenkrupp.
“There can be no break-up of the business,” he told Reuters.
(Reporting by Tom Kaeckenhoff, Douglas Busvine and Edward Taylor; editing by Jason Neely)