Capital One Expects Discover Acquisition to Close May 18 After Gaining Approvals

Capital One and Discover Financial Services said Friday (April 18) that they have received all required regulatory approvals to complete Capital One’s proposed acquisition of Discover.

With approvals announced Friday by the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC), the companies now expect the transaction to close May 18, subject to customary closing conditions, they said in a Friday press release.

“This is an exciting moment for Capital One and Discover,” Capital One founder, Chairman and CEO Richard Fairbank said in the release. “We understand the critical importance of a strong and competitive banking system to our customers and our economy, and we appreciate the thoughtful and diligent engagement of our regulators as they thoroughly reviewed this deal over the past 14 months.”

Discover Interim CEO and President Michael Shepherd said in the release: “This combination of our two great companies will increase competition in payment networks, offer a wide range of products to our customers, increase our resources devoted to innovation and security, and bring meaningful community benefits.”

Capital One announced the proposed acquisition in February 2024, saying the all-stock transaction, valued at $35.3 billion, will create a global payments platform with 70 million merchant acceptance points in more than 200 countries and territories.

In July, facing some criticism from community groups that feared the planned takeover would reduce services and increase costs for Americans, Capital One said that a combination of Capital One and Discover would provide more benefits to underserved communities than the companies would offer separately.

The Federal Reserve Board announced its approval of the proposed merger in a Friday press release, saying: “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 OCC said in a Friday press release announcing its conditional approval of the deal that it made its decision after analyzing the effect of the merger on communities, the banking industry and the U.S. financial system.

The regulator said its approval is conditioned upon approved plans to address and remediate any outstanding enforcement actions against Discover.

“The OCC is committed to a regulatory framework that expands access to financial services for consumers, businesses and communities,” Acting Comptroller of the Currency Rodney E. Hood said in the release.

These announcements came on the same day that the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board said they fined Discover Financial Services and two of its subsidiaries, alleging that they misclassified consumer credit cards as commercial, thereby requiring merchants to pay higher interchange fees.