Warren Buffett-backed leading United States consumer lender Capital One on February 19 said it plans to acquire credit card issuer Discover Financial Services in an all-stock deal valued at $35.3 billion, as per a Reuters report.
The merger, uniting two of the largest US credit card companies, aims to establish “a payments network that can compete with the largest payments networks and payments companies,” as stated by Richard Fairbank, Chairman and CEO of Capital One.
The consolidation positions Capital One alongside other major US-based payments networks such as Visa, Mastercard, and American Express.
Details of the Deal
Discover shareholders are set to receive 1.0192 Capital One shares for each Discover share, presenting a 26.6 percent premium over Discover’s closing price on Friday.
Upon completion, Capital One shareholders will hold a 60 percent stake in the combined company, with Discover shareholders retaining approximately 40 percent, according to the official statement.
As of 2022, Capital One, valued at $52.2 billion, ranks as the fourth-largest player in the US credit card market by volume, according to Nilson. Discover holds the sixth position in the market.
This is a breaking story, more updates are awaited…
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