Capital One and Discover merger approved by Federal Reserve Board

Core Viewpoint - Capital One Financial's acquisition of Discover Financial Services for $35.3 billion in an all-stock deal has received regulatory approval from the Federal Reserve and the Office of the Comptroller of the Currency [1][2]. Group 1: Acquisition Details - The acquisition was first announced in February 2024, and it includes the indirect acquisition of Discover Bank [3]. - Discover shareholders will receive 1.0192 Capital One shares for each Discover share, representing a 26% premium over Discover's closing price of $110.49 at the time of the announcement [3]. - After the merger, Capital One shareholders will own 60% of the combined entity, while Discover shareholders will hold 40% [4]. Group 2: Regulatory Approval - The Federal Reserve evaluated the acquisition based on statutory factors, including the financial and managerial resources of both companies, community needs, and the competitive and financial stability impacts of the merger [2]. - The deal is expected to close on May 18, 2024, according to a joint statement from both companies [4]. Group 3: Market Position - Both Capital One and Discover are among the largest credit card issuers in the U.S., and the merger will enhance Capital One's deposit base and credit card offerings [4].