Announcement • May 20

+ 1 more update

Capital One Financial Corporation (NYSE:COF) completed the acquisition of Discover Financial Services (NYSE:DFS).

Capital One Financial Corporation (NYSE:COF) entered into a definitive agreement to acquire Discover Financial Services (NYSE:DFS) for $35.3 billion on February 19, 2024. Under the terms of the agreement, Discover shareholders will receive 1.0192 Capital One shares for each Discover share. At close, Capital One shareholders will own approximately 60% and Discover shareholders will own approximately 40% of the combined company. Until the transaction closes, Discover and Capital One remain separate, independent companies. Michael Rhodes will continue to serve as Discover’s Chief Executive Officer. Rich Fairbank will remain Chief Executive Officer and Chairman of the Board of Capital One and will lead the combined company. The board of directors of Capital One will be increased by three directors for a total of fifteen directors, consisting of twelve Capital One Board members and three Discover Board members to be named at a later date. Once the transaction is complete, the combined company will be headquartered in McLean, Virginia. A termination fee of $1,380,000,000 will be payable by either Capital One or Discover, as applicable, in the event of a termination of the Merger Agreement under certain circumstances involving alternative acquisition proposals or changes in the recommendation of the other party’s board of directors. The transaction is subject to satisfaction of customary closing conditions, including regulatory approvals from Federal Reserve System and Office of the Comptroller of the Currency, and, to the extent applicable, the relevant banking statutes of the State of Delaware and the regulations of the Office of the State Bank Commissioner of the State of Delaware, approval by the shareholders of Capital One Financial Corporation and Discover Financial Services; authorization for listing on the New York Stock Exchange of the shares of Capital One Common Stock to be issued in the Merger, subject to official notice of issuance; effectiveness of the registration statement on Form S-4; and Discover and Capital One shall have received the opinion of respective legal advisor dated as of the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. The transaction has been unanimously approved by Board of Capital One Financial Corporation and Discover Financial Services. Capital One received approval from the Office of the Delaware State Bank Commissioner on December 18, 2024. As on April 24, 2024, the Federal Reserve Board announced it will extend through May 31, 2024, the public comment period for the application by Capital One Financial Corporation to acquire Discover Financial Services. The comment period is being extended to provide additional time for interested parties to comment on the proposal. As of April 24, 2024, the Office of the Comptroller of the Currency extended the comment period until May 31, 2024. On December 18, 2024, Capital One received approval from the Delaware State Bank Commissioner for its acquisition of Discover, which is a key step in the regulatory approval process to complete the transaction. The Capital One special meeting will be held at Capital One’s campus at 1600 Capital One Drive, McLean, Virginia 22102, on February 18, 2025 at 10:00 a.m., Eastern Time. The Discover special meeting will be held on February 18, 2025 at 2500 Lake Cook Road, Riverwoods, Illinois 60015 at 9:00 a.m., Central Time. The transaction is expected to close in late 2024 or early 2025. As of December 19, 2024, Capital One anticipates that the transaction will close in early 2025. The deal is expected to be more than 15% accretive to adjusted non-GAAP Earning Per Share in 2027. As on February 12, 2025, the transaction is expected to be completed by May 19, 2025, awaiting regulatory approvals. As of February 18, 2025, the transaction was approved by both acquirer and target's shareholders. As of April 7, 2025, the Justice Department approved the transaction. The transaction is expected to close in early 2025. As of April 18, 2025, Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency have approved the transaction and is expected to close on May 18, 2025, subject to the satisfaction or waiver of the remaining closing conditions set forth in the Merger Agreement. Edward D. Herlihy, Matthew M. Guest, Brandon C. Price, Jeannemarie O'Brien, Richard K. Kim, Rosemary Spaziani, Nelson O. Fitts, Franco Castelli, Gregory E. Pessin and Joshua M. Holmes of Wachtell, Lipton, Rosen & Katz LLP aced as legal advisors to Capital One. Centerview Partners LLC acted as financial advisor and fairness opinion provider to Capital One. H. Rodgin Cohen, Mitchell S. Eitel, Jared M. Fishman, Marc Treviño, Sarah Remmer Long, S. Eric Wang, Michael Orchowski, Mehdi Ansari of Sullivan & Cromwell LLP acted as legal advisors to Discover Financial Services. John Esposito, Thomas Chen, Samantha Owades and Michael O'Byrne of Morgan Stanley & Co. LLC acted as financial advisors and PJT Partners LP acted as financial advisor and fairness opinion provider to Discover Financial Services. In connection with Centerview’s services as the financial advisor to the Capital One board of directors, Capital One has agreed to pay Centerview an aggregate fee of $42 million, $5 million of which was payable upon the rendering of Centerview’s opinion and the remainder of which is payable contingent upon consummation of the Transaction. As compensation for its services in connection with the mergers, PJT Partners is entitled to receive from Discover an aggregate fee of $48 million, $10 million of which became payable upon the delivery of PJT Partners’ opinion to the Discover board of directors and the remainder of which is contingent and payable upon the consummation of the mergers. Computershare Inc. and Computershare Trust Company, N.A., acting jointly, will serve as the depositary, and Computershare Trust Company, N.A. will serve as transfer agent and registrar for the Capital One. Discover has retained Innisfree M&A Incorporated as proxy solicitor for a base fee of $50,000. Capital One has retained Morrow Sodali as proxy solicitor for a base fee of $65,000. Capital One Financial Corporation (NYSE:COF) completed the acquisition of Discover Financial Services (NYSE:DFS) on May 18, 2025. In connection with the acquisition, Capital One expanded its Board of Directors from 12 to 15 and appointed Thomas G. Maheras, Michael Shepherd, and Jennifer L. Wong, each a member of Discover's former Board of Directors, to serve on the Capital One Board of Directors. Cleary Gottlieb Steen & Hamilton LLP served as legal advisor to Capital One.

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Capital One Financial Corporation (NYSE:COF) completed the acquisition of Discover Financial Services (NYSE:DFS).

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