Report: Capital One to Acquire Discover, Uniting Two Credit Card Giants

Capital One is reportedly acquiring Discover Financial.

Bloomberg reported Monday (Feb. 19) that Capital One is considering the acquisition, and The Wall Street Journal (WSJ) reported later Monday that the bank is buying Discover and the deal could be announced Tuesday (Feb. 20). Both reports cited unnamed sources.

Neither Capital One nor Discover immediately replied to PYMNTS’ request for comment.

The deal would bring together two of the largest credit card companies in the United States. Discover would likely be valued at a premium to its current market value of about $28 billion, according to the WSJ report.

The Bloomberg report said the companies have been holding talks and if a deal were struck, it could be announced this week. It added that the transaction would be one of the world’s largest this year.

Discover reported a 62% drop in profit in the fourth quarter, attributing it to continuing fallout from its compliance and risk-management issues, according to the Bloomberg report.

In August, Discover President and CEO Roger Hochschild resigned from his post, weeks after the company revealed that it was the subject of a possible action by the Federal Deposit Insurance Corp.

The company also said in January that it was continuing to explore the possible sale of its student loan business. Management said during the company’s fourth-quarter earnings call that a sale of this business was on track to take place within months, with a deal to close in the second half of the year.

In June, Capital One acquired digital concierge company Velocity Black, which uses both technology and human experts to recommend and fulfill travel, entertainment, shopping and dining offerings to consumers.

The acquisition of Velocity Black was the latest in a series of moves Capital One made to partner with innovators to create new products, PYMNTS reported at the time. Those moves include its partnership with Hopper to build Capital One Travel, its acquisition of Wikibuy to power Capital One Shopping and its collaboration with SevenRooms to develop Capital One Dining.

“Velocity Black’s deep service expertise and unique tech platform complement Capital One’s focus on building experiences that meet the evolving needs of our customer,” Matt Knise, senior vice president of premium products and experiences at Capital One, said when announcing that acquisition.

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