Capital One Financial has announced an agreement to acquire Discover Financial Services for $35 billion exclusively in stock, creating the largest credit card company in the US based on loan volumes. The new company resulting from the merger will be positioned to compete with traditional Wall Street giants.

Capital One will pay 1.092 of its own shares for each share of Discover. The offer constitutes a 26.6% premium over Discover's closing stock price on February 16, when Bloomberg News first reported information about the deal. The transaction is expected to be completed by the end of 2024 or early 2025, subject to approval not only from the shareholders of both companies but also from the relevant regulatory authorities.

The acquisition of Discover is the largest globally since the beginning of the year, surpassing Synopsys' deal to acquire software company Ansys for $34 billion in January. By joining forces, the two financial institutions will surpass giants like JPMorgan Chase & Co. and Citigroup in issuing credit cards in the American market.

Shareholders of Capital One will control 60% of the new company formed by the merger, with Discover’s shareholders owning the remaining 40%.