Capital One is buying Discover in a $35.3 billion deal
CNN
Capital One announced it’s acquiring Discover Financial Services for $35.3 billion in an all-stock deal, giving the bank a leg up in the competitive credit card market.
Capital One announced it’s acquiring Discover Financial Services for $35.3 billion in an all-stock deal, giving the bank a leg up in the competitive credit card market. Under the terms of the deal announced Monday evening, Discover (DFS) shareholders will receive a little over one share of Capital One (COF) for every Discover share they own. That represents an almost 27% premium from Discover’s closing share price of $110.49 on Friday. If the deal is finalized, current Capital One shareholders will own a 60% stake in the combined company, while Discover shareholders will own the remaining 40%. Capital One said it believes the deal will close in late 2024 or early 2025. With a market valuation of almost $28 billion, Discover is considerably smaller than the other three major credit card networks in the US — Visa, Mastercard and American Express. Credit card networks are the liaison between card issuers and merchants, for whom they set fees. Getting Discover, which also issues its own credit cards, under the same roof as Capital One would give the bank a major leg up against competing credit card-issuing banks such as JPMorgan Chase, Bank of America and Citigroup, which don’t process transactions themselves.
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