TLDR:
- Capital One is buying Discover Financial Services for $35.3 billion in an all-stock deal.
- The merger will combine two of the largest credit card companies in the U.S.
Capital One announced its acquisition of Discover Financial Services for $35.3 billion in an all-stock deal. This move will give Capital One a significant advantage in the competitive credit card market, as it will now have control over two of the largest credit card companies in the United States. Discover shareholders will receive a little over one share of Capital One for every Discover share they own, representing a premium of almost 27% from Discover’s closing share price on Friday.
By acquiring Discover, which is considerably smaller than major credit card networks like Visa, Mastercard, and American Express, Capital One will gain a new source of revenue from merchant fees. The deal is expected to close in late 2024 or early 2025, pending regulatory approval. This merger will allow Capital One to build a robust payments network that can compete with larger players in the industry. The companies are set to host a joint conference call to discuss the details of the deal.
