Capital One Financial To Acquire Discover Financial Services In $35.3 Bln Stock Deal

Capital One Financial has agreed to acquire Discover Financial Services in a $35.3 billion all-stock transaction. Discover shareholders will receive 1.0192 Capital One shares for each Discover share, representing a premium of 26.6%. The deal is expected to generate expense synergies of $1.5 billion in 2027 and network synergies of $1.2 billion in the same year. The transaction is expected to be more than 15% accretive to adjusted non-GAAP earnings per share in 2027 and deliver a return on invested capital of 16% in the same year. The deal is set to close in late 2024 or early 2025, subject to regulatory approvals and shareholder approval. Three Discover board members will join the Capital One board upon closing.