Capital One Financial Corporation announced Monday that it inked a deal and purchased Discover Financial.
Capital One and Discover declared in their press release that both had entered into the binding deal, where Capital One was purchasing Discover in a “all-stock transaction valued at $35.3 billion.”(RELATED: Corporate America Is Dumping Diversity Professionals More Than Other Roles)
“From Capital One’s founding days, we set out to build a payments and banking company powered by modern technology. Our acquisition of Discover is a singular opportunity to bring together two very successful companies with complementary capabilities and franchises, and to build a payments network that can compete with the largest payments networks and payments companies,” Capital One CEO Richard Fairbank said, according to the press release.
“We look forward to a bright future as part of the Capital One family and to providing expanded opportunities for our loyal customers,” said Michael Rhodes, the CEO of Discover, according to the press release.
Capital One ranked as the fourth largest American credit card company, while Discover was the sixth largest, according to The Nilson Report in 2022. Discover has a market value of around $28 billion, The Washington Post reported.
Breaking: Capital One is buying Discover Financial in a deal that would marry two of the largest credit-card companies in the U.S. https://t.co/LJitpqjwrO https://t.co/LJitpqjwrO
— The Wall Street Journal (@WSJ) February 19, 2024
Discover announced back in January that their fourth quarter profit had declined by 62 percent, and shares have continued to fall by two percent since then, Bloomberg reported.
Credit card debt delinquency rates have been on its greatest rise since the Global Financial Crisis in 2007 that sparked the Great Recession, according to a 2023 report by the Federal Reserve Bank of New York. “The continued rise in credit card delinquency rates is broad based across area income and region, but particularly pronounced among millennials and those with auto loans or student loans,” said Donghoon Lee, an economic advisor for the Federal Reserve Bank of New York.