WILMINGTON – Federal regulators have approved Capital One Financial Corporation’s acquisition of Discover Financial Services, clearing the final regulatory hurdle of the $35 billion deal.
Both the Federal Reserve and the Office of the Comptroller of the Currency issued the decision on Friday, April 18. The merger is expected to be completed on May 18.
This new development came just days after Capital One’s Delaware Manager Joe Westcott told the Delaware Business Times that the two publicly traded companies were still waiting on regulatory approval from the federal government.
Capital One first entered into a definitive agreement with Discover in February 2024, and the process has continued to evolve over the last year. The Delaware State Bank Commissioner approved the transaction in December 2024, after Capital One highlighted it would invest billions through its community benefits plan. Delaware, where both banks have a notable presence, would see $35 million in this plan.
According to the Federal Reserve, the most recent approval also includes a consent order requiring the payment of a $100 million fine from Discover for overcharging certain interchange fees from 2007 to 2023; Capital One agreed to continue complying with that action.
The Office of the Comptroller of the Currency stated in its press release that Capital One is expected to have $660 billion in total assets following the merger transaction.
“The combination of our two great companies will increase competition in payment networks, offer a wider range of products to our customers, increase our resources devoted to innovation and security, and bring meaningful community benefits,” Interim CEO and President of Discover Michael Shepherd said in a press release from Capital One.
Capital One’s Executive Vice President and Head of External Affairs Andres Navarrette told DBT in August 2024 that leaders behind the scenes do not except customers of either company to see changes right away, but some slight changes will start occurring over time as the companies blend their expertise and back offices.
“I don’t think customers will necessarily feel the change day one. They’ll be able to continue using their cards, Discover branded, it will seem seamless to them. But, over time, they’ll start to feel more of Capital One’s ownership through technology, customer service, network and additive [benefits],” he said in that interview.
As leaders strive for consistency behind the scenes, Navarrette added that both employees and philanthropic efforts will remain in the First State throughout the transition. Nationwide, Capital One has 48,589 employees with 1,889 in Delaware as of 2023. Discover had about 1,000 employees in the First State.
Capital One has already provided a significant number of philanthropic efforts in Delaware, including the new Capital One DSU Innovation Venture and pitch competition to celebrate innovative measures by students across the country while offering up to $225,000 in seed funding to the winners.
“This is an exciting moment for Capital One and Discover. We understand the critical importance of a strong and competitive banking system to our customers and our economy, and we appreciate the thoughtful and diligent engagement of our regulators as they thoroughly reviewed this deal over the past 14 months,” Founder, Chairman, and CEO of Capital One Richard Fairbank said in the release.
“I am grateful to the thousands of associates across Capital One and Discover who have worked tirelessly to help us achieve this significant milestone,” he added. “We look forward to bringing these two great companies together with a profound sense of possibility and responsibility to deliver for our customers, associates, shareholders, and communities.”
A first quarter Capital One earnings call will be held on Tuesday, April 22 at 5 p.m.
