Capital One Financial Corporation (NYSE:COF) and Discover Financial Services (NYSE:DFS) have entered into a definitive agreement under which Capital One will acquire Discover in a total transaction valued at $35.3 billion.
Under the terms of the deal, Discover shareholders will receive 1.0192 Capital One shares for each Discover share, representing a 26.6% premium to Discover’s closing price of $110.49 on February 16, 2024. In finally, Capital One shareholders will own about 60% and Discover shareholders will own about 40% of the combined company.
“Since the founding days of Capital One, we have set out to build a payments and banking company powered by modern technology. The acquisition of Discover is a unique opportunity to bring together two highly successful companies with complementary capabilities and franchises, and create a payments network that can compete with the largest payment networks and payment companies,” said Richard Fairbank, founder, president and CEO . Capital One Officer. “Through this combination, we are creating a company that is exceptionally well-positioned to create significant value for consumers, small businesses, merchants and shareholders as technology continues to transform the payments and banking marketplace.”
“The transaction with Capital One brings together two strong brands with an enhanced ability to accelerate growth and maximizes value for our shareholders, enabling them to participate in the tremendous upside of the combined company,” said Michael Rhodes, CEO and President of Discover. “This agreement underscores the strength of our business and is a testament to the hard work of Discover’s employees. We look forward to a bright future as part of the Capital One family and to providing expanded opportunities for our loyal customers.”