October 25, 2018 / 3:51 PM / 10 months ago

UPDATE 4-Banco do Brasil's Caffarelli to become Cielo's new CEO - source

(Recasts with acceptance of offer, announcement expected Friday)

By Carolina Mandl

SAO PAULO, Oct 25 (Reuters) - Paulo Caffarelli, the chief executive of state lender Banco do Brasil SA, has accepted the offer to become the new CEO of the Brazilian card processor Cielo SA, one source with knowledge of the matter told Reuters on Thursday.

The announcement is likely to be made on Friday morning, the source said on condition of anonymity to discuss the confidential matter.

The move could be the first in a string of senior executive changes at Brazil's major state enterprises, where management shake-ups usually follow presidential elections like the one concluding on Sunday.

Banco do Brasil, Cielo and Caffarelli declined to comment.

Newspaper O Globo reported earlier on Thursday that Cielo had tapped Caffarelli as its new CEO.

Cielo has been searching for a new CEO since July, looking at potential candidates from its controlling shareholders, Banco do Brasil and Banco Bradesco SA.

Cielo has faced stiff competition from financial technology startups such as PagSeguro Digital Ltd and StoneCo Ltd , which have raised capital in highly successful U.S. initial public offerings this year.

Cielo shares have fallen more than 46 percent this year, as the company has lost market share to its competitors.

Caffarelli was named CEO of Banco do Brasil in May 2016 and has been credited for the bank's improved earnings.

Brazil's far-right presidential frontrunner Jair Bolsonaro plans to replace the CEOs of several state-owned companies if he wins the Oct. 28 election, the head of his party said on Tuesday.

Newspaper Folha de S. Paulo reported earlier this month that Bolsonaro could invite Alexandre Bettamio, head of the Latin America division of Bank of America Corp, to be CEO of Banco do Brasil. (Reporting by Carolina Mandl; Editing by Bernadette Baum, Susan Thomas and Richard Chang)

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