Vittorio Massone, an expert in management and digital transformation, comments on one of the most important corporate transactions in recent years: the acquisition of TD Ameritrade by Charles Schwab Corporation.
Schwab-Ameritrade merger, Vittorio Massone comments on the creation of the new financial giant
“The initiative taken by Charles Schwab against digital disruption in asset management is very interesting”: this is the first comment from Vittorio Massone, an expert in business and digital transformation, after the spreading of the news on the acquisition of TD Ameritrade by Charles Schwab Corporation. In an all-stock deal valued at $26 billion, the bank and stock brokerage firm Charles Schwab Corporation will acquire rival TD Ameritrade, whose shareholders will receive 1.0837 Schwab shares for each share they own, with a 17% premium. “It is clear that no one today can predict how the situation will evolve, but this is proof that incumbents have adequate tools to defend themselves and react”: the merger of the two companies, that is expected to take effect in 2020, will create a brokerage giant with more than $5 trillion in client assets, and more than 24 million client accounts. Suffice it to say that, after the merger announcement, Schwab shares jumped 8%, while TD Ameritrade’s stock shot up 16% higher. But, according to Massone, it is more than a numbers game, as it is fundamental “to use dimensions to create further efficiency and scale in the creation of new platforms – this deal aims to achieve this specific result – and, rather than defending what cannot be defended, it is better to quickly evolve business models according to the market”. Furthermore, he underlined that, just like Schwab has been doing for a long time, hiring people with digital skills and reducing or, sometimes, eliminating brokerage fees proves to be a winning choice. “The main objective”, said Vittorio Massone, “is not to lose, but to increase the client base and their loyalty, making things very difficult for new players. Sooner or later, these will have to find ways to create profit, and obviously this can only be done by means of motivated and cohesive Executive teams and patient Shareholders”.
Successful turnarounds and digital transformation, the career of Vittorio Massone
After graduating in Economics with full marks at the Sapienza University of Rome in 1989, Vittorio Massone obtained a Master in Business Administration at the Bocconi University of Milan. In 1989 he started his professional career serving as a Business Analyst for Klopman Textile Industry (Burlington Group) for two years. After becoming an Associate at Value Partners, a management consultant firm, he joined Bain & Company, where he held the positions of Manager (1995), Partner (1999), and Director (2004). During those years, he was involved in complex operations that allowed him to gain deep experience, and to work with top-level clients, such as FIAT, Consip, Rai, Walt Disney, and “Il Sole 24 Ore”. Among his most important operations: his first acquisition in the digital field (the acquisition of Virgilio/Matrix, 1999), the turnaround of Seat Pagine Gialle (1997-2001), and the turnaround of Poste Italiane (2002-2008). In 2010 Vittorio Massone decided to leave Italy and moved to Johannesburg, South Africa, where he joined Bain & Company Africa, holding the position of Managing Partner until 2018. Currently he is an expert consultant in digital transformation.