Helena Lyng Blak
11 weeks ago

What is the deal with the Capital One/Discover deal?

Capital One plans to acquire Discover, but antitrust authorities may block the deal.
Hand with red polished nail, holding Capital One card.
Eyeware, Shutterstock

In late February, US bank Capital One announced its plans to acquire payment processing network Discover Financial Services, in a $35.3 billion all-stock transaction.

Discover Financial Services is a prominent American financial services company, best known for its credit card brand, Discover Card, introduced in 1986. It is the fourth-largest credit card company in the US, surpassed only by Visa, American Express, and Mastercard.

Capital One is simultaneously one of the biggest US banks as well as a major American issuer of credit cards.

Before Capital One’s $35 billion bid, JPMorgan Chase spent a year in talks about a possible deal with Discover Financial, the Financial Times could reveal.

If the merger succeeds, Capital One shareholders will own 60% of the joined company, while Discover Financial shareholders will own 40%, Global Finance reports

The deal is expected to close in late 2024 or early 2025.

Supporters of the merger argue that it will benefit consumers by offering massive networks like Mastercard and Visa stronger competition.

Critics, however, have argued that the merger presents risks to small businesses and consumers alike and that it may negatively impact competition.

The Guardian reports that more than a dozen advocacy groups penned a letter to urge regulators to block the merger, considering it “dangerous” and “illegal”.

Opponents fear that the deal would threaten to reduce competition within the financial services sector, lead to a hike in fees, and put an undue risk to the stability of the US financial system as a whole.

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

5 hours ago Israeli Airstrike Hits Rafah Tent Camp Israeli airstrike on Rafah camp kills dozens, raising international alarm.
5 hours ago Meta and Call of Duty Maker Sued by Families of School Shooting Victims Families of the 2022 Uvalde school shooting victims file lawsuits against major corporations and officials, claiming they contributed to the tragedy.
7 hours ago Walmart and Capital One Call It Quits on Partnership Walmart and Capital One announce the end of their six-year card partnership amidst legal disputes.
8 hours ago US Market Open - May 27, 2024: Wall Street Wavers but Nasdaq Soars Daily update from the US market open.
10 hours ago Crypto, Currently: May 27, 2024 - Ethereum Leads Weekly Surge, Bitcoin Holds Steady Daily update on Ethereum, Bitcoin, and more!
1 day ago Debunking the headline: US GDP grows by a third ahead of EU in 15 years Europeans need not worry as much as these articles would suggest.
1 day ago Empowering Women Could Boost Economic Growth, Says IMF Economists Discover how gender equality initiatives could transform economies in Japan and Korea.