Capital One and Discover merger approved by Federal Reserve

Capital One Financial's exertion to acquire Discover Financial Services in a $35.3 cardinal all-stock deal has officially been approved by the Federal Reserve and the Office of the Comptroller of the Currency, the regulators announced connected Friday.

"The Board evaluated the exertion nether the statutory factors it is required to consider, including the fiscal and managerial resources of the companies, the convenience and needs of the communities to beryllium served by the combined organization, and the competitory and fiscal stableness impacts of the proposal," the Fed said successful a release.

Capital One archetypal announced it had entered into a definitive statement to acquire Discover successful February 2024. It volition besides indirectly get Discover Bank done the transaction.

Under the agreement, Discover shareholders volition person 1.0192 Capital One shares for each Discover stock oregon astir a 26% premium from Discover's closing terms of $110.49 astatine the time, Capital One said successful a release.

Capital One and Discover are among the largest recognition paper issuers successful the U.S., and the merger volition grow Capital One's deposit basal and its recognition paper offerings. 

After the woody closes, Capital One shareholders volition clasp 60% of the combined company, portion Discover shareholders ain 40%, according to the February 2024 release.

In a associated statement, Capital One and Discover said they expect to adjacent the woody connected May 18.

WATCH: Jamie Dimon connected Capital One’s $35.3 cardinal Discover acquisition: ‘Let them compete’