Capital One Financial Corporation announced on 19 February 2024 that it has entered into a definitive agreement to acquire Discover Financial Services in a transaction valued at approximately $35 billion, subject to regulatory approval. The deal would create the largest credit card issuer in the United States by loan balances.
SCALE AND CARD NETWORK
By loan balances, the combined entity would rank above JPMorgan Chase and Citigroup in the credit card segment. The transaction would also bring Discover's payment network — one of only a small number of card networks operating at national scale in the United States — under Capital One's ownership.
Discover's network is a fully owned infrastructure asset that Capital One could use to process its own card transactions, reducing the fees it currently pays to external networks.
REGULATORY PATH AND TIMELINE
The transaction requires approval from federal banking regulators, including the Federal Reserve and the Office of the Comptroller of the Currency, as well as clearance under competition law.
The announcement noted that the agreement is subject to customary closing conditions in addition to regulatory approval. Both companies will continue to operate independently during the review period.
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