Financial service provider Capital One Financial Corp acquired peer Discover Financial Services in an all-stock deal valued at $35.3 billion, on Monday.
Under the terms of the agreement, Discover shareholders will receive 1.0192 Capital One shares, said the firm, with a premium of 26.6% based on Discover’s closing price of $110.4 on February 16.
Additionally, Capital One shareholders will own about 60% and Discover shareholders will own approximately 40% of the combined company.
The deal is expected to close in late 2024 or early 2025, based on the regulatory approvals and approval by the shareholders of each company said Capital One.
Under this agreement, Capital One said it aims to build a global payments company where the acquisition will add up the investment, enabling Discover’s network to be more competitive with the largest payment networks and payments companies.
“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, Chief Executive of Capital One.
Riverwoods-based Discover Financial Services is a digital payments services company, as well as one of the largest credit card issuers in the United States. The company specializes in deposit products, consumer lending, consumer savings, payments, payment technology, loans and transaction services.
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