{"id":1254,"date":"2024-02-20T12:06:41","date_gmt":"2024-02-20T12:06:41","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/02\/20\/capital-one-to-acquire-discover-financial-services-in-35-3-billion-all-stock-deal\/"},"modified":"2024-02-20T12:06:41","modified_gmt":"2024-02-20T12:06:41","slug":"capital-one-to-acquire-discover-financial-services-in-35-3-billion-all-stock-deal","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/02\/20\/capital-one-to-acquire-discover-financial-services-in-35-3-billion-all-stock-deal\/","title":{"rendered":"Capital One to acquire Discover Financial Services in $35.3 billion all-stock deal"},"content":{"rendered":"
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Capital One Financial\u00a0is set to acquire\u00a0Discover Financial Services\u00a0in a\u00a0$35.3 billion all-stock deal. <\/p>\n

Under the agreement, Discover shareholders would receive 1.0192 Capital One shares for each Discover share or about a 26% premium from Discover\u2019s Friday closing price of $110.49. The companies said they expect the deal to close in late 2024 or early 2025, after which Capital One shareholders would hold 60% and Discover shareholders would own 40% of the combined company.<\/p>\n

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The merger of the two companies, which are among the largest credit card issuers in the U.S., would expand Capital One\u2019s credit card offerings and its deposit base. The company bought digital concierge service\u00a0Velocity Black, a premium credit card and luxury market platform, in June of last year.<\/p>\n

The Wall Street Journal\u00a0reported that Capital One, which already uses\u00a0Visa\u00a0and\u00a0Mastercard\u00a0networks, plans to keep the Discover brand.<\/p>\n

\u201cDiscover has done a better job of bringing in a lot of deposits and [has] access to a lot of institutions to run the debit card network and provide service. So it gives them a lot of deposit gathering ability, which particularly in the current market is enormously important,\u201d said David Schiff, West Monroe\u2019s head of consumer retail and banking.<\/p>\n

CNBC has reached out Capital One and Discover for comment.<\/p>\n

There aren\u2019t many parallels for similar acquisitions in the financial industry, meaning that the Capital One-Discover deal will likely have broad implications for merger activity within the sector, said Schiff.<\/p>\n

\u201cIt\u2019s a good example of the risk we\u2019re seeing in the market, where the competing interests from regulators for increased control and rigor balance against the competitive demands that are being made quite clearly, in terms of the overall market,\u201d Schiff said.<\/p>\n

The deal comes amid a period of increasing pressure for Discover, including regulatory scrutiny and\u00a0new leadership.\u00a0The current CEO, Michael Rhodes, was announced in December 2023.<\/p>\n

Shares of Discover are down 1.7% lower for the year, putting the company at a $27.63 billion market cap. Capital One has a market cap of $52.2 billion and shares of the company are up 4.6% in 2024.<\/p>\n

Bloomberg News reported Monday that\u00a0Capital One\u00a0was considering the Discover acquisition.<\/p>\n

The Capital One-Discover merger would be one of the largest deals announced so far this year.\u00a0Synopsys\u00a0announced a deal\u00a0to buy\u00a0Ansys\u00a0for $35 billion in January and\u00a0Diamondback Energy\u2019s $26 billion deal to buy privately held oil and gas producer\u00a0Endeavor Energy\u00a0was announced on Feb. 12.<\/p>\n<\/p>\n

This post appeared first on NBC NEWS<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Capital One Financial\u00a0is set to acquire\u00a0Discover Financial Services\u00a0in a\u00a0$35.3 billion all-stock deal. Under the agreement, Discover shareholders would receive 1.0192 Capital One shares for each Discover share or about a 26% premium from Discover\u2019s Friday closing price of $110.49. The companies said they expect the deal to close in late 2024 or early 2025, after […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1254","post","type-post","status-publish","format-standard","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1254","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=1254"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1254\/revisions"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=1254"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=1254"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=1254"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}