US Capital One Explores Acquisition of Discover... Expected to Be the Largest M&A This Year

U.S. financial firm Capital One is considering the acquisition of Discover Financial, which owns the credit card brand 'Diners Club.' If completed, it is expected to be the largest merger and acquisition (M&A) deal of the year.

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Bloomberg reported on the 19th (local time), citing sources, that Capital One is in talks to acquire Discover and that an announcement could be made this week. The outlet stated, "If successful, it could be the largest M&A deal so far this year," adding, "The largest credit card company in the U.S. by loan size will be created." The acquisition price under discussion has not been disclosed, but Discover's market capitalization was approximately $28 billion based on the closing price on the 16th. Capital One's market cap is around $52 billion.

Capital One, ranked ninth among U.S. banks and a credit card issuer, currently operates most of its cards through Visa and Mastercard, but it is expected to convert some to the Discover network through this acquisition. Upon acquiring Discover, Capital One's credit card network size will expand to about 305 million users.

Local media, including The Wall Street Journal (WSJ), noted that this acquisition is being pursued following regulatory investigations and management changes surrounding Discover last year. They also pointed out that many Discover cardholders have high credit scores, suggesting that Capital One's competitiveness could be strengthened. Previously, in June last year, Capital One acquired the digital concierge company Velocity Black.