Capital One announced Monday it will buy credit card issuer Discover Financial Services in an all-stock deal valued at $35.3 billion.
Capital One will pay in shares of its own company at a premium of 26.6% over the existing Discover share price.
The deal will combine two of the largest credit card companies in the United States. Capital One is the fourth-largest issuer, and Discover is the sixth-largest.
Capital One is valued at more than $52 billion, while Discover is valued at more than $27 billion.
The acquisition will be one of the largest business deals of 2024 so far.
Some consumers are slowly feeling the stress of more credit card debt
Americans held more than $1 trillion in combined credit card debt in the third quarter of 2023, according to the FDIC's latest report.
Capital One is expected to keep the Discover brand running after the deal goes through. The acquisition will give Capital One more access to the credit card space, where Discover currently competes with American Express, MasterCard and Visa as one of the four major U.S. card issuers.
Roughly 73% of U.S. adults have a credit account in their name, according to the U.S. Consumer Financial Protection Bureau.
Discover currently serves about $102 billion in loans through its cards. The company also offers other banking services, including private student and personal loans and checking and savings accounts.
