Capital One To Acquire Discover Financial For $35.3 Billion
Summary
Capital One, which expects the deal to close in late 2024 or early next year pending shareholder and regulatory approval, said the combination of the two companies will generate $2.7 billion in pre-tax synergies and add at least 15% to adjusted earnings per share in 2027. Last month, the company reported weaker-than-expected quarterly earnings and warned about tougher conditions facing consumers, which had prompted the lender to set aside higher provisions for credit losses. Discover shares fell sharply on the earnings report but have recouped most of those losses over the past month. In August, Discover announced that Roger Hochschild would step down from his role as chief executive officer, which followed the companys disclosure the previous month of incorrectly classified credit card accounts. The company also faced a separate probe by the Federal Deposit Insurance Corp., which was resolved in October when Discover reached a consent agreement with the FDIC under which the lender agreed to improve compliance and risk management.