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  • January 2021
  • Supplement
  • HBS Case Collection

A Half-Deal

By: Marco Di Maggio, Pedro Levindo and Carla Larangeira
  • Format:Print
  • | Language:English
  • | Pages:7
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Abstract

In June 2020, XP and Itaú faced intensified competition and tension in their partnership, with the latter owning a minority stake at XP. Two years earlier, in May 2017, Itaú had announced it would acquire 49.9% of XP for $1.8 billion, followed by three additional stages leading to company control.  Yet in August 2018, Brazil’s Central Bank, partially barred the deal, stating Itaú could become a minority shareholder.Tensions surfaced as soon as the deal was formalized, with both companies engaging in public attacks across several marketing campaigns, with Itaú estimated to lose around $27 million a day to XP from client migration. Moreover, XP faced increased competition from emerging investment platforms that were gaining ground in Brazil´s market. By mid-2020, XP´s financial results had skyrocketed, taking in $190 million in net income and $743 million in total revenues. As Guilherme Benchimol, XP´s CEO, looks ahead, he must define what strategies they should pursue to achieve further growth, considering competitive forces and market opportunities at hand.

Keywords

Fintech; Financing Strategy; Competition; Partners and Partnerships; Financing and Loans; Strategy; Latin America; Brazil

Citation

Di Maggio, Marco, Pedro Levindo, and Carla Larangeira. "A Half-Deal." Harvard Business School Supplement 221-058, January 2021.
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About The Author

Marco Di Maggio

Finance
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  • Ava Labs: Navigating the Next Blockchain By: Marco Di Maggio and Wenyao Sha
  • Cryptocurrency Investing: Stimulus Checks and Inflation Expectations By: Darren Aiello, Scott R. Baker, Tetyana Balyuk, Marco Di Maggio, Mark J. Johnson and Jason Kotter
  • MAYA Capital By: Robert F. White, Carla Larangeira and Pedro Levindo
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