In a major move within the credit card industry, Capital One Financial has announced its acquisition of Discover Financial Services for $35.3 billion. This all-stock transaction will bring together two of the largest credit card companies in the United States.
The deal marks a significant union between two non-bank credit card giants, with only American Express remaining as an exception to this trend among top players such as JPMorgan Chase and Citigroup. Upon completion, current shareholders of Capital One will hold 60 percent ownership in the newly combined company while Discover shareholders will own 40 percent.
Discover’s corporate headquarters is located at 2500 Lake Cook Road in Lake County and employs over 5,000 individuals throughout Chicago. The Virginia-based Capital One anticipates that this merger will result in $2.7 billion worth of pre-tax synergies and increase adjusted EPS by more than 15 percent by2027.The company also plans to maintain the Discover brand following completion.
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