FinTech News
Capital One Acquisition of Discover Expected to Close Next Month
Two financial brands appear set to join forces in the coming weeks after the deal cleared regulatory scrutiny.
The Latest on Capital One’s Acquisition of Discover:
Today, Capital One announced that its planned acquisition of Discover had received final regulatory approval. This came with the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency signing off on the deal. Previously, in December of last year, the Delaware State Bank Commissioner approved the transaction. Then, in February, more than 99% of shareholders for each company voted in favor of the acquisition.
With this approval, the transaction is expected to close on May 18th. However, it is subject to the satisfaction of customary closing conditions.
According to Capital One, after closing, customers will not see any immediate changes to either their Capital One or Discover accounts. Moreover, the bank says that it will communicate any conversions or changes “well in advance” of them taking place. Because of this, customers are advised that they’ll continue to be served via each brand’s individual communication channels.
Capital One’s purchase of Discover was first announced more than one year ago (in February 2024). The all-stock transaction is valued at approximately $35.3 billion.
What They’re Saying:
In a press release announcing the regulatory approval, Capital One founder, chairman, and CEO Richard Fairbank stated, “This is an exciting moment for Capital One and Discover. We understand the critical importance of a strong and competitive banking system to our customers and our economy, and we appreciate the thoughtful and diligent engagement of our regulators as they thoroughly reviewed this deal over the past 14 months.”
Fairbank added, “I am grateful to the thousands of associates across Capital One and Discover who have worked tirelessly to help us achieve this significant milestone. We look forward to bringing these two great companies together with a profound sense of possibility and responsibility to deliver for our customers, associates, shareholders, and communities.”
Meanwhile, Discover interim CEO and president Michael Shepherd said, “The combination of our two great companies will increase competition in payment networks, offer a wider range of products to our customers, increase our resources devoted to innovation and security, and bring meaningful community benefits.”
My Thoughts:
A few weeks ago, a report surfaced suggesting that the Department of Justice was set to block this deal. Of course, it’s unclear whether that was incorrect or whether minds were changed since then. Either way, barring any last-minute surprises, it looks as though this will be a thing.
Funny enough, this comes as I’ve just opened another Capital One credit card, meaning that I’ll have three credit cards, two checking accounts, and one savings account with this combined entity. While Capital One says it intends to keep Discover as its own brand, I am still curious to see how this plays out in the long run. Personally, I hope that they don’t convert Capital One cards to the Discover network too soon as I prefer the Mastercard network for overseas travel — but I have to imagine this move happens eventually, right?
Surely we’ll learn more as this deal moves forward and as the combined company gets settled.
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