The Strategist

Capital One will buy Discover for $35 billion in the biggest deal of 2024

02/21/2024 - 06:13

Capital One Financial Corporation's $35 billion acquisition of Discover Financial Services will become the largest M&A transaction of 2024.

Can Pac Swire
Can Pac Swire
Discover Financial Services will be acquired by Capital One Financial Corporation for a price of $35.3 billion. According to the press office of Capital One, for every Discover share, the company would pay 1.0192 shares of its own stock, which is a 26.6% premium over the closing price on February 16 ($110.49).

The deal is anticipated to close in late 2024 or early 2025A after receiving permission from shareholders and regulators.  As a result, 40% of the combined business will belong to Discover shareholders and 60% to Capital One shareholders.

According to Bloomberg, the merger of the two consumer finance companies will enable the merged business to overtake competitors Citigroup and JPMorgan Chase & Co. in terms of credit card balances in the United States. Capital One CEO Richard Fairbank said in a statement that there is a "unique opportunity" to unite two businesses that can rival the biggest payment networks.

The deal will be the biggest in the worldwide M&A market. The greatest purchase to date is thought to be Synopsys' $34 billion acquisition of software provider Ansys, which was disclosed in January.



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