TKAMY Thyssenkrupp AG (PK)

By Ruth Bender 

BERLIN -- Germany's Thyssenkrupp AG said Sunday current interim Chief Executive Guido Kerkhoff will stay in the role as CEO as the group's supervisory board approved his plan to split the steel conglomerate into two separately listed companies.

Thyssenkrupp's supervisory board in a meeting Sunday unanimously approved the plan presented last week under the lead of Mr. Kerkhoff to divide Thyssenkrupp into two independently traded companies -- one comprising the company's materials operations and the other the group's capital goods businesses.

Board member Bernhard Pellens, who had been tasked with finding a new CEO and chairman, was named chairman of the supervisory board.

"The concept has been developed by the Executive Board. For this reason it is only natural that this Executive Board will also implement the plan," Mr. Pellens said in a statement.

The appointment of Messrs. Kerkhoff and Pellens ends a monthslong management crisis at the ailing German industrial group, triggered by a clash between former management and activist shareholders over the future of the company.

Former CEO Heinrich Hiesinger quit the company abruptly in July, followed shortly after by Chairman Ulrich Lehner, citing a lack of support from shareholders who had pushed for improved profitability and a simpler structure. Mr. Kerkhoff, the group's former finance chief, had acted as CEO since.

Now Mr. Kerkhoff faces the challenging task of implementing one of the most dramatic overhauls in the group's history since the merger of steelmakers Thyssen and Krupp in 1999 that formed today's Thyssenkrupp.

In a bold step that surprised analysts and sent shares rallying, Mr. Kerkhoff last week unveiled the plan aimed at allowing Thyssenkrupp to stay independent while satisfying shareholders who had pushed for drastic changes or even a wider breakup.

The proposal received quick backing from the group's main stakeholders, including from Swedish activist investor Cevian Capital AB, which holds about 18% of the company and had been one of the loudest critics of Thyssenkrupp's conglomerate structure, calling it too costly, too slow and the reason for underperforming results.

Germany's largest labor union IG Metall said Friday the proposed split was an "opportunity to prevent a feared breakup" of the company but demanded the plan be implemented without job cuts. Mr. Kerkhoff told German television that there were no plans to cut jobs.

Thyssenkrupp now has roughly 18 months before shareholders are asked to vote on the split to detail its plans.

"Clearly, the announcement is a step in the right direction to unlock hidden value, but we are also left with some serious questions," such as about costs for the split, and management of the new companies, UBS analyst Carsten Riek said in a note to investors.

Mr. Kerkhoff, 50, started his career in the accounting department of German utility VEW AG before moving to media group Bertelsmann. From 2002 he worked his way up at Deutsche Telekom, heading up the group's European business until 2011, when he was appointed CFO at Thyssenkrupp.

Thyssenkrupp said the position of CFO and two open supervisory board seats still have to be filled.

Write to Ruth Bender at Ruth.Bender@wsj.com

(END) Dow Jones Newswires

September 30, 2018 11:59 ET (15:59 GMT)

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