Capital One-Discover Merger Set for Mid-May Close

Capital One has received regulatory approval for its $35 billion acquisition of Discover, with the merger expected to close by mid-May 2024. The move will create the largest US credit card issuer and provide Capital One access to Discover's payments network. In the second quarter of 2024, Capital One reported net income of $597 million ($1.38 per share), down from $1.3 billion the previous quarter, with adjusted earnings at $3.14 per share. Executives claim the merger will enhance competition with Visa and Mastercard, while critics warn it could reduce consumer choice and raise fees. Regulatory approval is seen by analysts as signaling a more lenient stance toward bank mergers, potentially prompting further consolidation. Analysts also suggest the acquisition will strengthen Capital One's earnings potential and resilience against economic uncertainties, though immediate changes for cardholders are not anticipated.