Capital One’s Acquisition of Discover Gets Green Light From DOJ — What You Need To Know

Back on December 18, 2024, Capital One received approval from the Office of the Delaware State Bank Commissioner to finalize its previously announced acquisition of Discover. Then, in February 2025, shareholders of both Capital One and Discover approved the acquisition — by overwhelming numbers on both sides.

It seemed like everything was fine, though a Department of Justice (DOJ) investigation into the merger last month called the deal’s progress into question. However, that hurdle has now been cleared.

In a major banking industry shakeup, Capital One announced in February 2024 that it would acquire Discover Financial Services. This theoretically meant that Capital One’s current volume in the credit card market would experience a significant boost — and that’s a step closer to happening now.

In addition, the acquisition will introduce a variety of changes to Capital One’s card portfolio, solidifying its position as a key player in the credit card industry.

Let’s dive into the details of this important acquisition update after shareholder approval.

Details of Capital One’s Acquisition of Discover

On February 19, 2024, Capital One agreed to purchase Discover Financial Services (DFS) in an all-stock deal valued at $35.3 billion, forming a payments behemoth with over 100 million customers that will compete directly with Visa, Mastercard, and American Express.

Under the terms of the agreement, Discover (DFS) stockholders would get slightly more than 1 Capital One (COF) share for every Discover share they possess. That was nearly a 27% increase over Discover’s closing share price of $110.49 back on Friday, February 16, 2024.

When the acquisition is completed, Capital One shareholders will own approximately 60%, and Discover shareholders will own approximately 40% of the combined company.

“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,” said Richard Fairbank, founder, chairman, and chief executive officer of Capital One.

Capital One anticipates that the transaction will close in early 2025, subject to the satisfaction of the remaining closing conditions outlined in the merger agreement between the companies. Conditions include approval by Discover and Capital One stockholders (which has now happened), as well as approval by the Board of Governors of the Federal Reserve System and the Office of the Comptroller of Currency. Capital One also will maintain Discover’s branch in Sussex County, Delaware.

Here’s what else we know about the acquisition:

• The acquisition will establish a global payments platform with 70 million merchant acceptance locations across more than 200 countries and territories. This development is significant considering that historically, Discover has not been as widely accepted globally as Visa, Mastercard, and American Express.
• Capital One will scale and leverage the benefits of an 11-year technology transformation across all of Discover’s businesses and the network.
• The acquisition is expected to generate network synergies of $1.2 billion in 2027, driven by adding Capital One debit purchase volume and selected credit card purchase volume to the Discover network.
• Adding Discover’s national direct savings bank will increase the combined company’s scale to compete with the nation’s largest banks.
• The deal will make both banks’ already great customer service even better. Together, they will be the only big banks with no fees, minimums, or overdraft fees, strengthening their positions further.

Steps Along the Way, From Announcement to Now

Capital One announced the shareholder approval on February 18, 2025, and the votes weren’t close. Both Discover and Capital One shareholders voted to approve the acquisition by more than 99%. At Capital One, the 99.8% of votes in favor represent 85.1% of the outstanding Capital One common stock held on December 27, 2024. At Discover, the 99.3% of votes in favor represent roughly 81.6% of Discover’s common stock held back on December 27.

The next development was a DOJ investigation in March 2025, with sources saying the deal could be anti-competitive in the subprime sector. That put the deal’s closure in question, though the ultimate decision from the DOJ was to let the deal move forward. A letter from the DOJ to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve said it doesn’t think there’s any reason to block the deal; these latter 2 bodies will review the merger with input from the DOJ.

After the acquisition is finalized, Capital One is anticipated to retain the Discover brand and transition some of its issued cards to the Discover network.

Final Thoughts

Once Capital One’s acquisition of Discover Financial Services is completed in early 2025, it will substantially impact the credit card market and the banking industry. Although the impact of this acquisition on existing Capital One and Discover cardholders remains unclear, we can expect to gain more insights in the coming months.

However, this news is likely great for consumers, as it will lead to increased competition and more chances for consumers to benefit from credit card rewards in the future.

We will continue to provide updates on developments between Capital One and Discover as more information becomes available. Be sure to check back for the latest details.