UniCredit chooses Andrea Orcel as chief executive

UniCredit has chosen high-profile dealmaker Andrea Orcel as its new chief executive and could announce the move as soon as this week, according to two people familiar with the situation.

Mr Orcel emerged as the leading contender for the job among a crowded field following the surprise resignation of Jean Pierre Mustier in November. The appointment has yet to be signed off by the Italian bank’s board.

One of Europe’s best-known bankers, Mr Orcel has been involved in some of the continent’s biggest M&A deals over the past two decades.

Most recently the 57-year-old Italian worked at UBS, but left in 2018 after being offered the job as chief executive of Spanish bank Santander. The offer was subsequently withdrawn over disagreements related to pay and profile.

Mr Orcel launched a €112m lawsuit against Santander over the withdrawn offer. According to several people familiar with the matter, a settlement has not been signed between Mr Orcel and Santander.

Santander and Mr Orcel did not immediately respond to a request for comment. UniCredit declined to comment.

The Italian bank’s international shareholders favoured Mr Orcel for his global banking experience. He was also the preferred choice of some Italian backers, including the billionaire businessman Leonardo Del Vecchio, a top-10 shareholder at UniCredit and an influential voice among its other investors.

Former Credit Suisse chief executive Tidjane Thiam was heavily courted for the CEO role by incoming UniCredit chairman Pier Carlo Padoan. But the Ivorian has instead pursued the launch of a $250m special purpose acquisition vehicle arranged by JPMorgan Chase.

UniCredit’s board is due to meet this week to sign off Mr Orcel’s appointment, which was first reported by Bloomberg, but the meeting could happen as early as Tuesday evening, according to people briefed on the plans.

Mr Orcel has a close relationship with UniCredit, having orchestrated the €21bn merger between Credito Italiano and UniCredito in 1998 that formed the group. UniCredit also moved as a client to UBS with Mr Orcel when he switched from Merrill Lynch in 2012.

If the board approves the appointment, one of the first decisions Mr Orcel will have to make is whether to acquire the government-owned bank Monte dei Paschi di Siena, a deal UniCredit’s shareholders bitterly oppose.

While at Merrill Lynch in 2008, Mr Orcel advised MPS on the €9bn acquisition of Banca Antonveneta, a deal that overstretched MPS at the height of the financial crisis.

According to people familiar with the matter, another factor that is still to be decided is the $50m in deferred pay Mr Orcel is due to receive from UBS but would lose in the event he joins a competitor.

“[Mr] Orcel said he would work for free for UniCredit during the first year if he found a settlement with Santander and solved the UBS issue,” one of the people said.

One person said Mr Orcel had agreed to a relatively low level of pay for the first year, which would double from 2022. Mr Mustier earned €1.2m in 2019 at UniCredit, far less than European peers such as recently departed UBS chief Sergio Ermotti, who was paid SFr13.8m (€13m), and Carlo Messina, chief of local rival Intesa Sanpaolo, who is paid €4.3m.

This story has been amended to clarify that a settlement has not been signed between Mr Orcel and Santander

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