Capital One to buy Discover Financial in $35.3 bln all-stock deal –
U.S. consumer bank Capital One plans to acquire U.S. credit card issuer Discover Financial Services in an all-stock transaction valued at $35.3 billion to create a global payments giant, the companies.
The deal, which is expected to receive intense antitrust scrutiny, would also form the sixth-largest U.S. bank by assets and a U.S. credit card behemoth that would compete with rivals JPMorgan Chase and Citigroup.
While Discover has a network that spans 200 countries and territories, it is still much smaller than rivals Visa, Mastercard and American Express.
Discover shareholders will receive 1.0192 Capital One share for each Discover share, representing a 26.6% premium over Discover’s closing price on Friday.
If concluded, Warren Buffett-backed Capital One shareholders will own 60% of the combined company, while Discover shareholders will own the rest.
The companies said they expect to achieve $2.7 billion in pre-tax synergies that would include cost-cutting and network savings.