Discover Financial Bought By Capital One for $35.3 Billion

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.

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