Nomura’s Piero Novelli Predicts New Batch of Global M&A Deals
Piero Novelli, the new co-head of mergers and acquisitions at Nomura Holdings, must now help steer Japan’s biggest investment bank toward its goal of becoming a global leader in M&A.
It’s an impressive number by any standard: During his 18-year career Piero Novelli has advised on almost $600 billion worth of deals. The new co-head of mergers and acquisitions at Nomura Holdings must now help steer Japan’s biggest investment bank toward its goal of becoming a global leader in M&A. After a two-year break from banking, he’s strongly enthusiastic. “I love the M&A business,” says Novelli, 45. “It allows you a latitude of issues, clients, culture and complexities that very few other businesses could present to you.” Novelli joined Nomura’s London office in January. He previously led M&A at UBS, where his clients included Barcelona-based Gas Natural in its €22.5 billion ($28.2 billion) acquisition of fellow Spanish energy provider Unión Fenosa in 2009. In 2007 he advised Italian energy giant Enel on its €11.1 billion partial takeover of Spain’s Endesa and defended ABN Amro Bank against a successful €71 billion bid by Royal Bank of Scotland, Banco Santander and Fortis.
Trained as an engineer, the soccer-loving Italian gets the math and the politics of cross-border transactions. Take the Endesa deal, a saga of three countries and four companies. Novelli’s UBS team advised not only Gas Natural on its hostile bid for Endesa but also Enel on its winning counterbid with Spanish conglomerate Acciona, after E.On of Germany made a €29.1 billion cash offer.
As M&A co-head with Tokyo-based Kentaro Okuda, Novelli aims to build Nomura’s European team and align it with the bank’s lofty ambitions. Nomura, which has ¥30 trillion ($376 billion) in assets and 27,000 employees, ranks first in Japanese M&A, with a 40.1 percent market share, according to Dealogic. But it’s 13th and 14th in global and European M&A, respectively, with less than 5 percent of both markets. “We want to use our global platform to take a much greater share of cross-continental deals,” Novelli says. He adds that the bank plans to become “global, narrow and deep,” with a focus on resources, energy and financials. Nomura’s strategy and operations are unaffected by the tragic events in Japan, Novelli says.
Still, the father of two faces an uphill battle. This year Nomura has lost several star European bankers who came onboard after it bought some of Lehman Brothers Holdings’ European business in 2008.
If anyone is up to the challenge, it’s Novelli, who was born and raised in Rome, where he earned an MSc in engineering from Sapienza – Università di Roma in 1989. Four years later, with a master’s in management from the Massachusetts Institute of Technology, he joined Merrill Lynch & Co. as an associate in New York.
Edward Annunziato, who ran European M&A when Novelli started at Merrill, thinks the rainmaker benefited from his spell in the U.S. At the time Merrill was exporting American capitalism to Europe, which had no history of cross-border deals. Novelli’s ability to bridge the cultural gap was an asset, says Annunziato, now chairman of London- and New York–based hedge fund administrator GlobeOp Financial Services.
Novelli transferred to London in 1994, when Merrill ranked 12th in M&A for Europe, the Middle East and Africa. He rose to prominence by focusing on consumer products and industrials. In a showcase of cultural sensitivity, Novelli advised French automaker Renault on its 1999 alliance with Japan’s almost-bankrupt Nissan Motor Co. When he resigned as head of European M&A in 2004 to go to UBS, Merrill had climbed to fifth place.
At UBS, Novelli moved quickly: By 2007 the Swiss bank had jumped from 12th to second in EMEA rankings. He quit UBS for personal reasons in late 2009 after taking a sabbatical.
Within five years, Novelli predicts, Nomura can crack the top ten in Asian and European M&A, by deal value and revenues. This global citizen is mindful of the rising power of state-owned enterprises. “For our advice to be valuable to our clients, particularly in the non–Anglo Saxon world, we need to place local values and principles front and center in our thinking,” he says.