rewrite this content using a minimum of 1000 words and keep HTML tags
Sign at the entrance to a Capital One bank branch in Manhattan.
Erik Mcgregor | Lightrocket | Getty Images
Capital One Financial’s application to acquire Discover Financial Services in a $35.3 billion all-stock deal has officially been approved by the Federal Reserve and the Office of the Comptroller of the Currency, the regulators announced on Friday.
“The Board evaluated the application under the statutory factors it is required to consider, including the financial and managerial resources of the companies, the convenience and needs of the communities to be served by the combined organization, and the competitive and financial stability impacts of the proposal,” the Fed said in a release.
Capital One first announced it had entered into a definitive agreement to acquire Discover in February 2024. It will also indirectly acquire Discover Bank through the transaction, which was approved by the Office of the Comptroller of the Currency on Friday.
Under the agreement, Discover shareholders will receive 1.0192 Capital One shares for each Discover share or about a 26% premium from Discover’s closing price of $110.49 at the time, Capital One said in a release.
Capital One and Discover are among the largest credit card issuers in the U.S., and the merger will expand Capital One’s deposit base and its credit card offerings.
As a condition of the merger, Capital One said it will comply with the Fed’s action against Discover, according to the release. The Fed fined Discover $100 million for overcharging certain interchange fees from 2007 through 2023, and the company is repaying those fees to affected customers.
The OCC said it approved Capital One’s application on the condition that it would take “corrective actions” to remediate harm and address the “root causes” of outstanding enforcement actions against Discover.
After the deal closes, Capital One shareholders will hold 60% of the combined company, while Discover shareholders own 40%, according to the February 2024 release.
In a joint statement, Capital One and Discover said they expect to close the deal on May 18.
WATCH: Jamie Dimon on Capital One’s $35.3 billion Discover acquisition: ‘Let them compete’
and include conclusion section that’s entertaining to read. do not include the title. Add a hyperlink to this website http://defi-daily.com and label it “DeFi Daily News” for more trending news articles like this
Source link
