A top American bank regulator has granted conditional approval of Capital One’s (COF) $35.30 billion U.S. all-stock purchase of Discover Financial Services (DFS).
The takeover deal was first announced in February 2024, and Capital One had hoped to finalize it in the first half of this year.
Under terms of the acquisition, Discover shareholders will receive 1.0192 Capital One shares for each Discover share they own.
Capital One shareholders will own 60% of the newly combined company while Discover shareholders will own the remaining 40%.
The merger of the two credit card issuers now looks like a done deal after the U.S. Department of Justice previously signed off on the takeover.
The combination with Discover Financial will further expand Capital One’s credit card offerings and its deposit base.
Capital One has said that it plans to keep the Discover brand once the deal is finalized.
The acquisition is seen as a win for Capital One, which has been looking to boost its market share and better compete against the largest U.S. credit card issuers, Mastercard (MA) and Visa (V).
Capital One’s stock has declined 9% this year to trade at $162.77 U.S. per share, while Discover Financial’s stock has fallen 8% on the year to currently trade at $159.63 U.S.