Thyssenkrupp, Germany's largest steel group, is undergoing a surprising change at the top. CEO Martina Merz has asked the Supervisory Board for talks on an amicable termination of her mandate, the M-Dax group announced on Monday. At the same time, the Essen-based company has already presented a successor: Miguel Ángel López Borrego, who is currently CEO of the industrial supplier Norma Group, is to take over as CEO on June 1.

Jonas Jansen

Business correspondent in Dusseldorf.

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The news did not go down well on the stock market: the share price temporarily lost more than 8 percent and was thus at the bottom of the M-Dax.
Merz has led the Executive Board of Thyssenkrupp since 2019, only last year her contract was extended by another five years until 2028. The 60-year-old former Bosch manager was the first woman to head the long-established industrial group. Shortly after taking office, she sold the profitable elevator division for around 17 billion euros to finance the further transformation of Thyssenkrupp. Since taking office, she has been working on a solution for the steel business, but she has not made any decisive progress with it.

The plan is to get the volatile business with blast furnaces and steel mills out of the group so that it can concentrate its capital on more stable and profitable businesses in the long term: materials trading, rolling bearings for wind turbines, high-quality forgings, braking and control technology for cars or plants for hydrogen and ammonia. However, the "independence" and a "capital market-ready positioning" is also the best way for the development of steel, because it opens up new opportunities for partnerships and financing, Merz assured again and again.

On the employee side, the spin-off has always been viewed with skepticism, with the division's approximately 26,000 employees relying more on the group of companies than on an investor from outside. Many names are being discussed, from the financial investor CVC to various interested parties, for example from Brazil. The employees have undergone some changes of direction, more than 20 years ago an IPO for the steel division was up for debate, in the meantime a planned merger with the Indian competitor Tata failed and later contacts with competitors such as Liberty Global also came to nothing.

Several business segments developed weaker than expected

Again and again there is even speculation about a German "Stahl AG", i.e. an alliance with Salzgitter AG. Where it goes from now is still completely open, but the debate has been dragging on for a long time. This also increased the pressure on Merz. Because not only steel was paralyzed, but also the planned spin-off of naval activities and the IPO of the hydrogen company Nucera are developing into a stalemate. Merz herself had to admit that the pace of implementation fell short of her expectations.

Nevertheless, the actions of the Executive Board were ratified at the Annual General Meeting in February with 99 percent of the votes, and the capital side and above all the major shareholder Krupp Foundation were always clearly on the side of the CEO. It was not the overall orientation that was criticized, but the pace.

Even under the new boss Borrego, the strategy is to be maintained. "With him at the helm, we will continue on the path of transformation on the basis of the strategic lines we have developed," Siegfried Russwurm, Chairman of the Supervisory Board, was quoted as saying in a statement. "This is challenging, but necessary. After all, the restructuring of Thyssenkrupp has not yet been completed." Russwurm thanked the outgoing Chairwoman of the Board.

Regret came from the Krupp Foundation

The Krupp Foundation also regretted Merz's withdrawal in a statement. "I remain convinced that thyssenkrupp can become sustainably competitive and profitable in the long term with the strategic course it has embarked on," said Ursula Gather, Chairwoman of the Board of Trustees. Merz himself emphasized that "essential strategic decisions" had been made. "In the upcoming phase, the focus will be on financial expertise and further improving performance," said Merz. "That's where additional commercial skills are certainly useful."

She wants to open the way for this in the interest of the group. Borrego and the chairman of the supervisory board, Russwurm, know each other from their time at Siemens, the manager was once head of Siemens Spain. Until last fall, he was chairman of the wind turbine manufacturer Siemens-Gamesa.

After Siemens Energy took control of the company, its CEO Christian Bruch replaced him. Borrego graduated from high school in Hesse and initially studied in Mannheim, the Spaniard speaks well german. He only moved from the Supervisory Board to the top of the supplier Norma at the beginning of January for a limited period of time.