Capital One’s acquisition deal with Discover at $35B

Mon 08/12/2024

by Ellie LeTu

Source: Bloomberg

This $35B M&A deal is one of the largest announced in 2024 and is expected to close by late 2024 or early 2025. Capital One is currently working with federal regulators to ensure the deal complies with antitrust laws and highlights the benefits it will bring to the U.S. banking system. We’re excited to see how the deal turn out to be 🍧🥄

• Synergies - Capital One

  • Becoming the largest credit card loans issuer in the US.

  • Saving costs estimated at $1.5B annually from switching to Discover’s network.

  • Aiming to gain 16% ROI by 2027.

  • Projecting a positive long-term vision on the market, with interest rates cut.

• Synergies - Discover

  • Less reliant on Visa and Mastercard.

  • Saving costs by joining with Capital One’s infrastructure and marketing.

  • Increasing reputation after the scandal and their stock hitting a low.

• Concerns

  • Violation of antitrust regulation.

  • Discover’s stock is volatile and creates uncertainty for Capital One when the transaction is approved and it is time to close.