Andrea Orcel’s first major decision is likely to be the takeover of one of the country’s most troubled banks, state-owned Monte dei Paschi di Siena.
The new CEO of Italy’s biggest bank by assets has built a reputation as a strategic visionary and dealmaker. He joins UniCredit at a delicate time for both Italy and its banking system. With the Covid crisis signaling more consolidation in the sector and the central government urging a deal, Andrea Orcel’s first major decision is likely to be the takeover of one of the country’s most troubled banks, state-owned Monte dei Paschi di Siena (MPS).
Some close observers suspect the new CEO is eyeing more than a struggling bank’s rescue, however. Rumor has it that Orcel was picked to pursue a more ambitious tie-up with Mediobanca or to look further afield to expand UniCredit’s global presence.
“A big push for a deal with MPS remains, and Orcel will have to go along with it,” says Flavio Carpenzano, senior portfolio manager for fixed income at AllianceBernstein, “but he might be more focused on acquisitions outside Italy: perhaps Germany, Austria, Central and Eastern Europe or potentially, ventures in payment services and fintech companies.”
Head of investment banking at UBS from 2012 to 2018 after two decades at Merrill Lynch, Orcel is considered one of the top mergers and acquisitions specialists in Europe. He contributed to the merger that led to the creation of UniCredit itself in 1998.
His appointment might come at a price, however. Reportedly, his €2 million ($2.4 million) salary may be contingent on his giving up all or part of €112 million he is claiming in a lawsuit against Santander.
The Orcel-Santander affair made headlines in 2019 when Ana Botín, executive chairman of the Spanish banking group, offered Orcel a €35 million package to lead the bank. Orcel accepted and quit UBS, but the offer was then suddenly taken off the table. An acrimonious legal battle followed, still ongoing.
With Orcel now joining UniCredit, Santander might then be free from most of its obligations—as might UBS, which was obliged to pay Orcel a hefty sum unless he joined a competitor.