UniCredit Set to Name Andrea Orcel as CEO to Replace Mustier

UniCredit SpA is set to appoint Andrea Orcel as chief executive officer, choosing one of Europe’s best known bankers to replace Jean Pierre Mustier, according to people familiar with the discussions.

The bank’s board will meet Wednesday to approve the nomination, some of the people said. They asked to not be named because the matter isn’t public. A spokesman for UniCredit declined to comment.

UniCredit Set to Name Andrea Orcel as CEO to Replace Mustier

The appointment will mark Orcel’s return to the top tier of European banking after he left his job as head of UBS Group AG’s investment bank in 2018 only to see an offer to join Banco Santander SA rescinded in a dispute over pay. The 57-year-old Rome native made his reputation as a dealmaker who helped banking executives build empires in the pre-crash era.

“Orcel has a strong international profile and he’s a guarantee to international investors that UniCredit will not retreat to Italy,” said Francesco Castelli, head of fixed income at asset manager Banor Capital. “With him, expectations are running high that UniCredit will be a key player in European M&A.”

UniCredit jumped as much as 5.6% on the news and closed up 4.5%. The stock has fallen about 38% in the last 12 months.

Mustier Exit

Mustier decided to step down as CEO in November after clashing with the board over strategy. While the Frenchman was credited with cleaning up the bank’s balance sheet, critics say he disposed of profitable businesses and was unable to move to a growth strategy after the turnaround.

UniCredit has spent weeks winnowing down its list of candidates for the top job, with Orcel and Fincantieri SpA General Manager Fabio Gallia emerging as the two finalists, people with knowledge of the matter said late last week.

A spokesman for Orcel couldn’t immediately be reached for comment.

Orcel got support from some of UniCredit’s foreign institutional investors, as well as Italian shareholders including Luxottica founder Leonardo del Vecchio and Fondazione CariVerona, people familiar with the matter have said. Those backing him cited his status as a top European transactional banker with a deep understanding of international finance.

As an investment banker for Merrill Lynch in 1998, Orcel pitched a merger of UniCredito and Credito Italiano that created the joint bank that would later become UniCredit. He also was the architect of Banca Monte dei Paschi di Siena SpA’s troubled acquisition of Antonveneta in 2007, which has dogged the bank ever since.

The new UniCredit chief is likely to face major strategic decisions within weeks of his appointment, including whether to take over Monte Paschi from the Italian state and under which conditions. The government has offered incentives from tax relief to protection from legal risks to help land a deal.

Santander Suit

Orcel is suing Santander for about 100 million euros ($122 million ) over its decision to withdraw the CEO job offer. The dispute centered around deferred compensation that he would lose if he took another job in the financial industry after leaving UBS.

The next UniCredit CEO will be working with former Italian Finance Minister Pier Carlo Padoan, who is set to become UniCredit’s new chairman in April, replacing Cesare Bisoni. During his tenure in government, Padoan dealt with a banking crisis that led to the nationalization of Monte Paschi in 2017.

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