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Back in the 1980s, Andrea Orcel's university thesis was on hostile takeovers. Almost 40 years later, the ambitious UniCredit boss finds himself at the center of the biggest European banking drama in years, as he closes out what could be Europe's first major cross-border banking deal since the financial crisis. One deal puts him up against the German government.
The Milanese lender this week raised its stake in rival Commerzbank to 21%, pending approval from the European Central Bank. This will make UniCredit the largest shareholder, overtaking the German government. German Chancellor Olaf Scholz called the stake-building “unfriendly” and “hostile,” but Orsel said he had no plans to pick a fight with Berlin.
“Andrea is not naive. I think he's a tactician and knows what he's doing. . . . He knows exactly how to achieve the end goal. . . . We may not know exactly, but he knows,” says Alessandro Profumo, former CEO of UniCredit.
Berlin's refusal to negotiate has reportedly irritated Orcel, who doesn't usually take no for an answer. He wakes up before dawn for his daily sports session and works tirelessly with bankers at Barclays and Bank of America to find solutions.
His dedication to his job, combined with his ability to advise CEOs on near-impossible deals, has earned Mr. Orcel, 61, a reputation for being both smart and ruthless. “Andrea is down-to-earth and assertive…He's very demanding, so people may feel he's too demanding…But what he demands of others is what he demands of himself.” “We're looking for the best,” says Andrew Gazitua, former chief operating officer of Merrill Lynch's investment banking division, where Orcel worked. He is also realistic. In a country where many CEOs demand more formality, he is referred to by his first name.
Raised in Rome, where his mother worked for the United Nations and his Sicilian father ran a small leasing company, Orcel attended the prestigious Lycée Français Chateaubriand, home to the children of aristocrats and diplomats. While on vacation from La Sapienza University in Rome, he decided he wanted to become a banker instead.
After working at Goldman Sachs and the Boston Consulting Group, Mr. Orcel joined Merrill Lynch in 1992 and led the company for 20 consecutive years, including the merger of Italy's Credito Italiano and UniCredit for 21 billion euros to form UniCredit. After successfully completing an M&A transaction, he was nicknamed “Cristiano.'' Banker Ronaldo.”
“He was very knowledgeable and always available for consultation. He also had a network of personal relationships that gave him easy access to decision makers,” said Credito Italiano at the time. Profumo, who was in charge, says:
Mr. Orcel served as president of UBS from 2014 to 2018, during which time he befriended Santander's late chairman Emilio Botín and others, advising on acquisitions that turned the company into a global banking group. But he also gained more enemies.
Relations with the Botín family soured in 2018 when Santander withdrew its offer to appoint him CEO over compensation. When Mr. Orcel filed a multi-million euro lawsuit, the high finance world thought he was crazy. However, the court ultimately awarded him €43.5 million in compensation. “He's just doing what he thinks is right, and he always takes responsibility for his actions, even if it makes him look like an asshole. . . . I hate to say it, but most of the time. , he's right,'' says a senior London banker.
He may have been wrong in 2007 when he advised RBS on its disastrous takeover of ABN AMRO. He once told the FT: I can't help but feel responsible for my role. ”
His transformation of UniCredit, which has seen its stock rise nearly 400 percent since joining the company in 2021, is the most significant yet. Securing a deal with Commerzbank would give him a permanent place in European finance. But German Finance Minister Christian Lindner told MPs this week that UniCredit's actions “in terms of its style and communication did not contribute to strengthening trust in the government.”
This is not the first time that Orcel, who has little time for diplomacy, has quarreled with public authorities. In 2021, Italy's Mario Draghi government wanted to sell Monte dei Paschi di Siena to UniCredit. The parties could not come to an agreement and Mr. Orcel walked away. Since President Vladimir Putin's invasion of Ukraine in 2022, Orcel has also been at odds with the ECB over how to deal with UniCredit's continued Russian presence. “Andrea is not a politician. He's not a bullshit guy,” said Davide Serra, a friend and founder of asset management firm Algebris and a longtime UniCredit investor. “Moral persuasion doesn't work on him. . . . That's why people who don't like him say he has bad character.”
Commerzbank may be worth the latest fight. Insiders say Orcel's preferred option is to merge with UniCredit's existing German subsidiary, HVB. At the right price, it would be hard for the Germans to say no. This time, the Italian government is also cooperating.
Orcel may be divisive. “He's a bit like Marmite: you either hate him or love him,” says Amir Hobeida, who worked with him at Merrill Lynch and UBS. However, he once again succeeded in exposing his opponent's weaknesses. The game theory master's move will force a reassessment on regulators who have long pushed for greater banking integration in the EU. Rivals, who have long wondered whether the Italian bank will ultimately be enough for such an extraordinarily ambitious manager, even as it expands, are still reluctant to look over their shoulders. I might not stop.
silvia.borrelli@ft.com
