Termination Fee for Capital One-Discover Merger Deal Fixed at $1.38 Billion

Discover Financial Services (DFS.N) or Capital One Financial (COF.N) have agreed to a termination fee of $1.38 billion if their proposed merger encounters specified obstacles, as outlined in a regulatory filing released on Thursday.

Termination Fee for Capital One-Discover Merger Deal Fixed at $1.38 Billion
The merger aims to create the largest U.S. credit card issuer, granting Capital One access to Discover’s payment network.

The merger, an all-stock transaction revealed on Monday, is poised to establish the largest credit card issuer in the United States.

Additionally, it positions Capital One to leverage Discover’s payment network, thereby reducing its dependence on industry behemoths Visa (V.N) and Mastercard (MA.N).

Termination Fee for Capital One-Discover Merger Deal Fixed at $1.38 Billion
Capital One anticipates generating $1.2 billion in revenue by 2027 through shifting its card portfolio to Discover’s network.

Capital One, currently the third-largest issuer of Visa and MasterCard credit cards in the U.S., anticipates that transitioning its card portfolio from these two payment giants to Discover’s network will yield $1.2 billion in revenue by 2027.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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