Morgan Stanley-E-Trade integration on track amid pandemic - Business Insider

The Morgan Stanley-E-Trade deal is still set to close later this year as the coronavirus pandemic slams the stock market and the wider financial services industry prepares for a US recession.Once the deal closes, Sid Visentini, who heads up Morgan Stanley's firm strategy, execution, and capital efforts, is set to lead the two firms' integration from a firm-wide perspective, Business Insider has learned.Plans around integrating two industry giants like Morgan Stanley and E-Trade is a critical part of any merger process, especially one of this scale.Visit BI Prime for more stories.

Early in the morning on February 20, the day after what would turn out to be the S&P 500's peak, Morgan Stanley announced it had agreed to buy E-Trade in an all-stock deal valued at $13 billion.Back then, the US had only started reporting coronavirus cases, and there weren't any major clues that domestic stocks were about to lurch out of their longest bull run in history amid the pandemic.Two months later, Morgan Stanley says the all-stock deal is still scheduled to close in the fourth quarter.The New York investment bank has named several leaders who will lead the two firms' integration once the deal closes, and is implementing work-flow processes for their eventual meshing, according to a person familiar with the matter.Once the deal closes, Sebastiano “Sid” Visentini, who heads up firm strategy, execution, and capital at Morgan Stanley, is set to lead the integration from a firm-wide perspective, according to the person.

Visentini previously oversaw the firm's capital management and stress-testing initiatives and was promoted to also oversee strategy and execution in January 2018, according to LinkedIn. He joined the firm 12 years ago.Within Morgan Stanley's $2.4 trillion wealth management business, among the world's largest, Michael Hennessy, a managing director who was involved in the firm's Smith Barney integration, will also handle integration efforts. A company spokesperson declined to comment.Hennessy will be involved with the day-to-day coordination and office of project management matters, the person familiar with the situation told Business Insider. He joined the firm in January 2009, according to LinkedIn.

Spencer Platt/Getty Images

Preparation for the intricate integration also includes 19 different work streams — which refers to different areas of tasks to be completed in succession by a group, in project management lingo — and some 55 sub-activities within those areas, according to the person.The first steps of the integration are being carried out remotely. The teams have been working over Zoom and have done a kickoff meeting, the person said.

Plans around integrating two industry giants like Morgan Stanley and E-Trade is a critical part of any merger process, especially one of this scale.The official announcement of the planned deal came after two other key wealth management and brokerage players, Charles Schwab and TD Ameritrade, announced their own combination last November amid intense pricing pressures playing out across the industry. For Morgan Stanley, its deal secured a foothold in catering to regular customers and some small independent registered investment advisers.It also opened the business up to people who may one day become lucrative wealth management clients through E-Trade's stock-plan administration business, a route it's already bet on through its acquisition of Solium Capital, now known as Shareworks by Morgan Stanley.The deal marked a departure from the investment bank's longtime reputation for catering to big corporations and the ultra-wealthy, underlining Wall Street's increasing meshing with Main Street customers.

“E-Trade will hold the shareholder vote this summer, and we remain on track to close the transaction in the fourth quarter,” Morgan Stanley finance chief Jon Pruzan said last Thursday on a call with analysts to discuss the firm's first-quarter earnings. The two firms have received the green light from the Department of Justice's anti-trust division, according to a late March Bloomberg report. E-Trade is set to report first-quarter earnings on Thursday.Late last week, Morgan Stanley released a filing with fresh details about the merger's background, describing when the firms' chief executives came together last December to discuss the possibility of a combination.James Gorman, the Morgan Stanley chief who recently recovered from the novel coronavirus, spoke with E-Trade chief executive Mike Pizzi on December 11 over the phone “about market dynamics in the financial services industry generally,” including the possibility of a “future strategic arrangement between the two companies” on a high level.They met one week later, this time in person, and Gorman “expressed an interest in having discussions” about the possibility of such an arrangement. The official announcement would come roughly eight weeks later; the two companies were code-named “Moon” and “Eagle.”