Capital One Advances $35.3bn Discover Acquisition
Deal News | Dec 20, 2024 | EIN
In a significant development in the financial services sector, the Office of the Delaware State Bank Commissioner has approved Capital One Financial Corporation's acquisition of Discover Financial Services and its banking subsidiary. This strategic merger, announced in February 2024 and valued at $35.3 billion, is positioned to form the sixth largest bank in the United States by assets, and to expand Capital One’s global payments platform. Upon completion, Capital One shareholders will own approximately 60% of the newly merged entity, while Discover shareholders will hold around 40%. This merger, expected to finalize in early 2025, still requires the consent of the shareholders from both companies, and regulatory approval from the Federal Reserve Board and the Office of the Comptroller of the Currency. Coinciding with the acquisition, Capital One has committed to a five-year $265 billion community benefits plan, reflecting its broader strategic goals. As of September 2024, Capital One reported significant financial metrics, including $353.6 billion in deposits and total assets amounting to $486.4 billion.
Sectors
- Financial Services
- Mergers and Acquisitions
Geography
- United States – The entities involved, including Capital One and Discover, are major US financial corporations, and the transaction significantly impacts the US banking sector.
- Delaware – The Office of the Delaware State Bank Commissioner was key in approving the merger, highlighting Delaware's role in regulatory oversight.
Industry
- Financial Services – The acquisition involves major players within banking and payment services, showing significant consolidation in the financial services industry.
- Mergers and Acquisitions – The article centers on the regulatory approval and pending execution of a major acquisition deal worth $35.3 billion.
Financials
- $35.3 billion – The transaction value for Capital One's acquisition of Discover Financial Services.
- 1.0192 Capital One shares – Share exchange ratio for Discover Financial shareholders as part of the acquisition.
- $353.6 billion – Capital One's reported deposits as of September 30, 2024.
- $486.4 billion – Capital One's total assets reported as of September 30, 2024.
- $265 billion – Capital One's five-year community benefits plan tied to the acquisition.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Capital One Financial Corporation | Bidding Company | Company | Capital One is a prominent financial corporation engaged in banking services, known for credit cards, loans, and savings accounts. |
| Discover Financial Services | Target Company | Company | Discover is a digital banking and payments services company, including its subsidiary, Discover Bank. |
| Office of the Delaware State Bank Commissioner | Regulatory Body | Government | The state agency responsible for approving bank mergers and acquisitions in Delaware. |
| Richard Fairbank | CEO | People | Founder, Chairman, and CEO of Capital One, playing a critical role in the acquisition strategy. |