Capital One Receives Approval for Discover Acquisition
Deal News | Apr 21, 2025 | EIN
Capital One Financial Corp. has received regulatory approval to acquire Discover Financial Services for $35.3 billion, effectively making it the largest credit card issuer by loans in the U.S. The acquisition, approved by the U.S. Federal Reserve and the Office of the Comptroller of the Currency, has been vetted for its impact on financial stability and competitiveness. The deal, expected to close by May 18, 2025, will pave the way for Capital One to increase its annual revenue by $1.2 billion and offer enhanced payment network capabilities. Following the merger, Capital One shareholders will own 60% of the combined company, with Discover shareholders owning the remaining 40%. This transaction will also establish Capital One as the sixth-largest bank in the U.S. by assets, increasing competition with major players like JPMorgan Chase and Citigroup.
Sectors
- Financial Services
- Banking
- Payments
Geography
- United States – The article primarily focuses on the U.S. market, with both Capital One and Discover being major U.S. financial entities.
Industry
- Financial Services – The article discusses a major acquisition involving two significant players in the financial services sector, Capital One and Discover Financial Services.
- Banking – Both Capital One and Discover are involved in banking activities, making this a crucial transaction in the banking industry, impacting credit card issuance and payment networks.
- Payments – The acquisition impacts payment services as it involves payment networks like Discover Network, Diners Club International, and Pulse, essential elements in the Payments industry.
Financials
- $35.3 billion – The acquisition price for Capital One to acquire Discover Financial Services.
- $1.2 billion – Expected increase in Capital One's annual revenue due to the acquisition.
- $2.7 billion – Expected pre-tax synergies from cost reductions and savings by 2027.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Capital One Financial Corp. | Bidding Company | Company | A leading American depository bank providing services primarily through digital channels with international operations in Europe and Canada. |
| Discover Financial Services | Target Company | Company | A prominent U.S. banking holding company engaged in direct banking and payment services. |
| U.S. Federal Reserve | Regulatory Authority | Government | Responsible for approving the acquisition based on financial stability and competitiveness criteria. |
| Office of the Comptroller of the Currency | Regulatory Authority | Government | Regulatory body that approved the deal ensuring compliance with financial regulations. |
| US Department of Justice | Regulatory Consultant | Government | Provided a conclusion supporting the merger between Capital One and Discover. |