Draw at the entrance of a Capital One Bank branch in Manhattan.
Erik McGregor | Lighttrocket | Getty images
The application from Capital One Financial to acquire Discover Financial Services in a $ 35.3 billion All-Stock Deal has been official approved Due to the Federal Reserve and the office of the Currency Comproller, the supervisors announced on Friday.
“The board has evaluated the application under the legal factors they have to consider, including the financial and management sources of the companies, the convenience and needs of the communities operated by the combined organization, and the competition and financial stability effects of the proposal,” the FED said in a release.
Capital One First announced It was a final agreement to acquire Discover in February 2024. It will also indirectly acquire Discover Bank via the transaction, which was approved by the office of the Current of the Currency on Friday.
According to the Agreement, Discover shareholders receive 1,0192 Capital One shares for each share discovered or about a premium of 26% of the closing price of Discover of $ 110.49 at that time, Capital One said in a release.
Capital One and Discover are among the greatest credit card publishers in the US, and the merger will expand the deposit base of Capital One and its credit card offer.
As a condition for the merger, Capital One said that according to the release it will meet the action of the Fed against Discover. The FED fined has imposed $ 100 million for overloading certain exchange costs from 2007 to 2023, and the company pays back those reimbursements to affected customers.
The OCC said that it would take the application from Capital One on condition that it would take “corrective measures” to remedy damage and tackle the “main causes” of outstanding enforcement actions against Discover.
After the deal has been closed, Capital One shareholders will have 60% of the combined company, while Discover shareholders have 40%, according to the release of February 2024.
In a joint statement, Capital One and Discover said they expect to close the deal on May 18.
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