MILAN, Jan 3 (Reuters) - Key shareholders in Nexi

, Europe's biggest payments group by volume of

transactions processed, have signed a governance pact that

includes keeping CEO Paolo Bertoluzzo in charge, the company

said on Friday.

Nexi is set to name a new board of directors in the spring

and there had been recurring speculation in financial circles in

recent months that it could be headed for a change at the helm.

The payments sector has seen valuations plunge from

post-pandemic highs, and faces rising competition as technology

evolves rapidly bringing in new players.

Operating in a sector deemed of strategic relevance for the

country, Nexi has the Italian state - through investment agency

CDP Equity - as a leading shareholder with a 14.5% stake.

The governance pact ties together CDP Equity and Nexi's

private equity owners. They represent in aggregate 55% of the

company's capital and name 11 out of 13 board members.

CDP Equity names five members, including the chairperson.

San Francisco-based private equity firm Hellman & Friedman,

which owns 21.2% of Nexi, names three directors.

Mercury, a vehicle owned by funds Bain, Advent and Clessidra

which has reduced its Nexi stake over the years and now owns

9.9%, gets to name two members together with shareholder AB

Europe.

Nexi listed in Milan in April 2019 at 9 euros a share, which

it managed to more than double over the next two years as the

COVID-19 pandemic supercharged digital payments.

The share price has declined sharply from a July 2021 peak

of 19 euros. On Friday, Nexi shares were broadly flat at 5.4

euros at 1237 GMT.

The depressed valuation makes it hard for Nexi's fund owners

to liquidate their investment.

The industry's woes have prompted investment banks in recent

years to study a potential merger of Nexi with its main European

rival, France's Worldline.

However, bankers say any deal would first need an agreement

between Italy and France, which both are shareholders and have

special powers to block deals in key sectors.