The Federal Reserve Officially Approves Capital One’s $35.3 Billion Attack on Visa and Mastercard…

https://app.stocks.news/stock-detail/NYSE/DFS/overviewWell, it’s official, the Fed just greenlit Capital One’s $35.3 billion all-stock gobblefest of Discover, and the Office of the Comptroller of the Currency rubber-stamped it too. I guess big banks really do get bigger, huh? 

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In short, Capital One first dropped this “definitive agreement” (read: corporate prenup) back in February, and now it’s game on—with the deal set to close on May 18th. Discover shareholders get 1.0192 Capital One shares for each DFS share—a 26% premium from when this whole thing was announced. Bigly. Meaning, congrats to anyone still holding Discover. You’re now the proud owner of a new, but still the same, bank stock and a front-row seat to what could be a full-blown payments war. 

Simply put, this is Capital One saying they’re done playing second-tier network and we want to punch Visa and Mastercard in the face. CEO Richard Fairbank straight-up said this merger is the foundation for building a “global payments company.” Translation: They’re coming for the big boys, and they’re bringing hell, along with Discover’s tech stack, merchant network, and 100M+ customer base with them. 

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If you’re wondering why Discover agreed to get swallowed whole, maybe it has something to do with the $100 million slap on the wrist they just got from the Fed for overcharging interchange fees for, oh, just 16 years. No big deal. Siri, define suffering from shafting consumers. For this reason, Capital One has to “comply with the Fed’s action” against Discover, which really just means “clean up their mess and act like you’re fixing it.” Additionally, the OCC made Capital One promised to “remediate the root causes” of Discover’s screw-ups. 

Now, that’s all good and well, but the real girth of this story is from the numbers. After the deal closes, Capital One shareholders will own 60% of the combined company. Discover gets 40%. Three DFS board members get a golden ticket to join Capital One’s board, and we’ll find out who they are once the smoke clears. Meanwhile, Capital One’s balance sheet balloons to nearly $500 billion in assets and $350B+ in deposits (essentially leapfrogging their way to becoming a top-tier banking beast). 

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Of course, if this works, Capital One will not only boost its credit card empire—it’ll own the rails. Which let me remind you, is like the holy grail in fintech. Not just issuing cards, but moving the money. So yeah, this is a BFD in the financial world. And it’s a bet that bigger and vertically integrated will win the war over who controls your swipe, your tap, and your credit score. The regulators waved it through, the market’s watching, and the payments space just got a lot more interesting. 

For now, keep an eye on both stocks as Capital One and Discover are both up 1% and 3.26%, respectively over the last five days. And as always, place your bets accordingly, friends. Until next time… 

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Stocks.News does not hold positions in companies mentioned in the article.