Capital One to Acquire Discover consolodating major US credit card companies in $35 Billion Deal

The merger marks a significant milestone in the payments industry, promising enhanced value for consumers and reshaping competitive dynamics.

In a historic move that redefines the landscape of the financial services industry, Capital One Financial Corporation (NYSE: COF) announced today its plan to acquire Discover Financial Services (NYSE: DFS) for $35 billion. This all-stock transaction unites two of the nation’s leading credit card issuers, setting the stage for the creation of a robust payments network capable of competing on a global scale.

The acquisition, expected to close by the end of the year, subject to regulatory approvals and other customary closing conditions, represents a strategic alignment of two companies with complementary strengths. Discover Financial shareholders are set to receive Capital One shares valued at nearly $140 each, signifying a substantial premium over recent closing prices and highlighting the confidence in the combined entity’s future growth prospects.

Enhancing the Payments Ecosystem

“From Capital One’s founding days, we set out to build a payments and banking company powered by modern technology. Our acquisition of Discover is a singular opportunity to bring together two very successful companies with complementary capabilities and franchises, and to build a payments network that can compete with the largest payments networks and payments companies,” said Richard Fairbank, founder, Chairman and Chief Executive Officer of Capital One. “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.”

The merger not only combines the vast customer bases of both companies but also integrates Discover’s payment processing network, offering a unique opportunity to challenge the dominance of existing networks and provide enhanced choices and services to consumers and merchants alike. With a shared focus on innovation and customer service, the new entity is poised to drive forward the evolution of digital payments, promoting greater access and financial inclusion.