Thyssenkrupp chiefs give green light for breakup

German industrial conglomerate Thyssenkrupp should be split into two separate firms, the group's supervisory board agreed Sunday, meaning only the shareholders' go-ahead is needed to break up the economic giant.

With a unanimous vote in favour, Thyssenkrupp "is taking a courageous step forward" with "a convincing plan," newly elected non-executive chairman Bernhard Pellens said in a statement.

Essen-based Thyssenkrupp has been in turmoil since the summer, when its chief executive and supervisory board chairman both quit in quick succession.

"We can now finally give our employees a clear orientation for the future of the company," said Guido Kerkhoff, who was confirmed as chief executive after filling the role on an interim basis since former boss Heinrich Hiesinger threw in the towel.

"Our solution is responsible and equally serves the interests of employees, customers and shareholders." Activist investors like Swedish investment firm Cevian and US hedge fund Elliott have been pushing for a split between TK's steelmaking arm, recently merged with the European operations of India's Tata, and the industrial side of the business, which makes products from elevators to submarines and car parts.

The shareholders argue that the division would unlock value for investors, which the markets appeared to confirm Thursday when Thyssenkrupp stock soared after the executive board announced the plan. Supervisory board approval means that it only remains for the shareholders to green-light the restructuring at a general meeting.

Executive board members said Thursday they would expect to begin the process "in 12 to 18 months".