Capital One, backed by Warren Buffett, announced its intention to acquire Discover Financial Services in a deal worth $35.3 billion.

This merger, which would bring together two major US credit card companies, aims to establish a strong payments network to compete with other industry giants like Visa and Mastercard. 

Under the terms of the deal, Discover shareholders will receive 1.0192 Capital One shares for each Discover share, offering a premium over Discover’s recent stock price.

 Capital One will hold a 60 percent stake in the merged company, while Discover shareholders will retain approximately 40 percent. 

The acquisition is expected to undergo regulatory scrutiny and may face opposition from Democratic progressives concerned about consolidation in the banking industry. 

The deal is anticipated to be approved by late 2024 or early 2025, with potential challenges due to increased focus on competition in banking sectors by the current administration.

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