First Capital's acquisition of Discover Financial may be the world's largest M&A deal of the year, and it could come as early as this week.

Zhitong App has learned from informed sources that First Capital is considering acquiring the credit card loan institution Discover Financial, which would be one of the largest transactions globally so far this year. It is understood that First Capital, based in McLean, Virginia, is working with advisors and has been in negotiations with Discover Financial, headquartered in Riverwoods, Illinois. As of the time of writing, Discover Financial's stock price has fallen by about 2% this year, bringing the company's market value to $27.6 billion, while First Capital's market value is approximately $52.2 billion. The sources mentioned above indicated that if First Capital can reach an agreement, an announcement could be made as early as this week. According to data, this deal would merge two prominent consumer finance brands, creating the largest credit card company in the U.S. in terms of loan volume, surpassing long-time competitors JPMorgan Chase (JPM.US) and Citigroup (C.US). Currently, discussions are ongoing, and there is no certainty yet whether a deal will be reached. Representatives from First Capital and Discover Financial did not immediately respond to requests for comments during the public holiday. It is worth noting that the acquisition of Discover Financial by First Capital could potentially be one of the largest acquisitions globally so far this year, according to data. The largest deal announced this year was Synopsys' approximately $34 billion acquisition of software developer Ansys (ANSS.US) in January. High-End Clients It is known that First Capital is renowned for its advertisements, which feature celebrities like Jennifer Garner and Samuel L. Jackson asking, "What's in your wallet?" Led by 73-year-old CEO Richard Fairbank, the company has always focused on serving subprime consumers who carry balances on their credit card bills each month. In recent years, First Capital has been striving to attract more high-end consumers who tend to spend more and are more loyal. Last year, the company agreed to acquire digital concierge service Velocity Black to further penetrate the luxury market dominated by American Express (AXP.US) and JPMorgan Chase. In contrast, Discover Financial has long focused on high-quality customers with good credit ratings, although it has historically avoided using the flashy signing bonuses and generous perks that many competitors employ. It is worth noting that in the second half of last year, Discover Financial warned of some compliance issues, leading to a significant drop in the company's stock price. This issue ultimately led to the resignation of then-CEO Roger Hochschild while First Capital was seeking to finalize a deal. In addition, Discover Financial stated in January that its fourth-quarter profit fell by 62% as the institution continues to deal with the impact of this event. The company suspended buybacks last year and has been looking for a buyer for its student loan business. In December last year, Discover Financial appointed Michael Roz as the new CEO, who was previously with Toronto-Dominion Bank, and is expected to take office in early March.