Capital One Finalizes $35 Billion Discover Purchase

Fifteen months after it was announced, Capital One’s $35 billion acquisition of Discover is official.

The deal, finalized Sunday (May 18), creates the largest credit card issuer in terms of loan volume in the U.S.

“This deal brings together two innovative, mission-driven companies that together are poised to deliver breakthrough products and experiences to consumers, businesses and merchants,” Capital One Founder/CEO Richard D. Fairbank said in a news release, thanking Discover’s board, executives and interim CEO Michael Shepherd for their support.

“Through the efforts of thousands of associates across Capital One and Discover, we are well-positioned to continue our quest to change banking for good for millions of customers,” Fairbank added.

Capital One announced in February 2024 that it had entered into a definitive agreement to acquire Discover. The deal was approved by the Federal Reserve and the Office of the Comptroller of the Currency on April 18 of this year and by the Delaware State Bank Commissioner last December.

Weeks before the acquisition was finalized, a pair of Democratic lawmakers wrote to the Federal Reserve asking it to reconsider its approval.

In a letter to the central bank, Rep. Maxine Waters of California and Sen. Elizabeth Warren of Massachusetts argued that the decision to “rubber stamp” the deal would harm consumers and small businesses.

“Merchants would have no choice but to accept the terms dictated by Capital One’s network, since they need to access the customers of the largest credit card issuer in the country,” the letter said.

Writing about the merger soon after it was announced, PYMNTS noted its potential benefit to paycheck-to-paycheck consumers.

As for Capital One, that report added, it gains scale with the merger’s completion, by employing the capabilities that Discover has been building or have already been built, stretching across cross-border commerce and payments in general.

Because Discover has its own network, Capital One gains the ability to more firmly cement a drive to compete against Visa and Mastercard.

The report also quotes Fairbank’s comments from when the deal was first announced, saying the acquisition would “build a payments network that can compete with the largest payments networks and payments companies.”

In other Capital One news, the company recently agreed to settle a lawsuit brought by depositors for $455 million. The plaintiffs in that case had accused Capital One of falsely promising high interest rates on its 360 Savings accounts while offering better rates to new customers of its similarly named 360 Performance Savings accounts.