Wall Street Breakfast
Capital One snags Discover in $35.3B stock deal
Feb 20, 2024
Capital One is set to acquire Discover Financial for $35.3B in stock. They also discuss Bayer's 95% dividend cut and Palo Alto Networks' earnings preview. The episode covers the creation of the largest US credit card company through the acquisition, the impact on Capital One's EPS, and cybersecurity firm's positive outlook for the second quarter.
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Quick takeaways
- Capital One acquires Discover Financial Services in a $35.3B stock deal, creating the largest US credit card company.
- Bayer plans to slash its dividend by 95% to reduce debt following the Monsanto purchase and legal liabilities.
Deep dives
Capital One to Acquire Discover in Stock-Based Deal
Capital One has confirmed its agreement to acquire Discover Financial Services in a stock-based deal valued at $35.3 billion. This acquisition will create the largest US credit card company by loan volume. The deal offers DFS holders a premium of almost 27%. Capital One expects the transaction to generate $2.7 billion in pre-tax synergies and contribute over 15% to its adjusted EPS in 2027. The companies anticipate the deal to close in late 2024 or early 2025.
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