* Continental says Linde CEO Reitzle to become new chairman
* Chairman Rolf Koerfer to remain on supervisory board
* TUI CEO Frenzel steps down from Continental's board
* Continental shares up 5.8 percent
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FRANKFURT, Sept 9 (Reuters) - German automotive supplier Continental AG picked a new chairman for its supervisory board, filling a power vacuum created by management upheaval last month.
Wolfgang Reitzle, chief executive of industrial gas company Linde, will become Continental's new chairman after the board approves his appointment, Continental said on Wednesday.
Last month, Continental's main shareholder, Schaeffler, claimed the scalp of the auto supplier's CEO, and in exchange Schaeffler-backed Chairman Rolf Koerfer agreed to step down by Sept. 29.
"We are very pleased that we have been able to persuade Professor Reitzle to take on this challenging mandate," said Schaeffler owner Maria-Elisabeth Schaeffler in a statement.
Continental said Koerfer would remain on the board, albeit not as its head. In addition, TUI CEO Michael Frenzel was stepping down from the board due to his workload at the German travel company.
Continental shares were up 5.8 percent at 31.2 euros by 1413 GMT, while the German midcap index edged up 0.2 percent.
Separately, sources close to the matter told Reuters Continental is pressing to issue new shares worth 1.5 billion euros ($2.2 billion) before year's end to take advantage of the good market environment. (Reporting by Arno Schuetze, Philipp Halstrick, Patricia Uhlig and Maria Sheahan; Editing by David Holmes) ($1=.6898 Euro)