Capital One Financial’s application to acquire Discover Financial Services for $35.3 billion in an all-stock deal has been approved by the Federal Reserve and the Office of the Comptroller of the Currency. The regulators evaluated the application based on various factors including financial resources, community needs, and competitive impacts. Capital One first announced the agreement in February 2024 and will indirectly acquire Discover Bank through the transaction.
Under the agreement, Discover shareholders will receive 1.0192 Capital One shares for each Discover share, a 26% premium from Discover’s closing price at the time. The merger will expand Capital One’s deposit base and credit card offerings. As a condition of the merger, Capital One will comply with the Fed’s actions against Discover, including a fine of $100 million for overcharging certain interchange fees.
The OCC approved the application with the condition that Capital One takes corrective actions to remediate harm and address outstanding enforcement actions against Discover. After the deal closes, Capital One shareholders will hold 60% of the combined company, with Discover shareholders owning 40%. The deal is expected to close on May 18, according to a joint statement from Capital One and Discover.
Note: The image is for illustrative purposes only and is not the original image associated with the presented article. Due to copyright reasons, we are unable to use the original images. However, you can still enjoy the accurate and up-to-date content and information provided.
