The United States consumer bank Capital One, backed by Warren Buffett, intends to purchase Discover Financial Services (DFS.N).
A U.S. credit card issuer, in an all-stock deal estimated to be worth $35.3 billion, in order to establish a worldwide payments behemoth.
Intense antitrust scrutiny is anticipated for this acquisition, which would create the sixth-largest U.S. bank.
Even with its 200-country and territory-wide network, Discover is still far smaller than competitors Visa (V.N).
For every Discover share, owners will receive 1.0192 Capital One shares, which represents a 26.6% premium over Discover's Friday closing price.
If a deal is reached, shareholders of Capital One will own 60% of the merged business, with shareholders of Discover holding the remaining 40%.
In a note to clients, Baird equities research analysts stated that a Capital One/Discover merger would have "significant strategic merit,"
Capital One credit cards use Discover's network and the potential for cost savings that comes with increased scale.