Capital One to acquire Discover for $35.3 billion in all-stock deal


Capital One is purchasing Discover Financial Services for $35.3 billion, the banking giant announced Monday — an all-stock deal that brings together two of the country’s largest credit card companies.

The two financial giants combined would become the biggest credit card lender in the nation, according to data compiled by Bloomberg Intelligence. Discover, based in Riverwoods, Ill., has a market value of nearly $28 billion, while McLean, Va.-based Capital One is valued at about $52 billion.

Under the deal’s terms, Discover shareholders will receive a little over one share of Capital One for every Discover share they own — a 26.6 percent premium from Discover’s closing share price of $110.49 on Friday.

Once the deal closes, current Capital One shareholders will own a 60 percent stake in the combined company, while Discover shareholders will own the remaining 40 percent.

Richard Fairbank, founder and chief executive of Capital One, hailed the acquisition as an “opportunity to bring together two very successful companies with complementary capabilities and franchises.”

“Through this combination, we’re creating a company that is exceptionally well-positioned to create significant value for consumers, small businesses, merchants, and shareholders as technology continues to transform the payments and banking marketplace,” Fairbank said in the statement.

Credit card usage has soared in recent months, as Americans are depleting their extra savings and recalibrating spending to keep up with recent inflation. Overall credit card balances hit a record $1.13 trillion in 2023, according to the Federal Reserve Bank of New York.

The deal between two of the biggest credit card lenders could face antitrust scrutiny from regulators, who are engaged in an overhaul of bank capital rules that have faced stiff industry opposition.

The transaction is expected to close in late 2024 or early 2025 — “subject to satisfaction of customary closing conditions, including regulatory approvals and approval by the shareholders of each company,” according to a release by Capital One. If it finalizes, it would be one of the largest since the 2008 financial crisis.


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