The Office of the Delaware State Bank Commissioner has granted approval for Capital One’s $35.3bn acquisition of digital banking and payment services company Discover Financial Services and its subsidiary, Discover Bank.
This regulatory clearance marks a key step towards completing the merger, which is anticipated to occur in early 2025.
Initially announced in February 2024, the deal remains subject to other closing conditions, including approval by the shareholders of both companies, as well as the Federal Reserve Board and the Office of the Comptroller of the Currency.
Upon completion, the merger is set to create the largest credit card issuer in the US, with more than $250bn in outstanding loans.
As part of the acquisition, shareholders of Discover Financial Services will receive 1.0192 Capital One shares for each Discover Financial Services share held.
Once finalised, Capital One shareholders will own approximately 60% of the combined company, with Discover Financial Services shareholders holding the remaining 40%.
In July 2024, Capital One unveiled a five-year, $265bn community benefits plan tied to the acquisition.
Developed in collaboration with community groups, the plan includes $35m in grants for Delaware-based nonprofit organisations and commitments to retain Discover Financial Services’ branch in Sussex County.
In October 2024, New York Attorney General Letitia James launched an antitrust investigation into the transaction, citing concerns about its potential impact on competition in the state.
Capital One and Discover Financial Services hold $9.5bn and $6.5bn, respectively, in credit card loans in New York. This has raised concerns that the merger could disproportionately affect vulnerable residents with subprime credit scores.
Headquartered in Virginia, Capital One along with its subsidiaries has $353.6bn in deposits and $486.4bn in total assets as of 30 September 2024.
The firm provides a wide range of financial products and services to consumers, small businesses, and commercial clients through multiple channels.
