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(Reuters) – Capital One Considering Potential Acquisition of Discover Financial Services

Capital One, an online consumer bank and credit card issuer backed by investor Warren Buffett, is reportedly considering a potential acquisition of credit card lender Discover Financial Services, according to a person familiar with the matter.

The terms of the potential acquisition have not been disclosed, but a deal could potentially be announced as early as Tuesday, according to the source.

Discover Financial Services currently has a market capitalization of $27.6 billion, while Capital One is valued at $52.2 billion, according to LSEG data.

The initial report on the potential acquisition was first reported by Bloomberg News.

As of now, Discover and Capital One have not immediately responded to requests for comment.

Capital One has been working with advisers to “study a deal” for Discover, according to Bloomberg’s report.

The potential acquisition comes after TD Bank Group veteran Michael Rhodes took over as Discover Financial’s new CEO following the departure of Roger Hochschild in August.

Additionally, in late 2023, Discover announced that it was exploring the sale of its student loan business and would stop accepting new student loan applications in February. Furthermore, the company disclosed a regulatory review over some incorrectly classified credit card accounts from mid-2007 and entered into a consent order with the Federal Deposit Insurance Corporation (FDIC) to improve its consumer compliance and related corporate governance.

In January, Discover and Capital One reported significant drops in fourth-quarter profit, with Discover’s profit falling by 62% and Capital One’s profit falling by 43%. This was attributed to increased provisions for losses from bad loans as rising interest rates raised the risk of consumer defaults on credit card debt and mortgages.

The potential acquisition of Discover Financial Services by Capital One could have significant implications for both companies and their stakeholders. This is where AI legalese decoder can be helpful in analyzing and understanding the legal and regulatory implications of such a deal. By utilizing AI-powered technology, the legalese decoder can efficiently process and interpret complex legal documents, contracts, and regulatory filings related to the potential acquisition. This can provide valuable insights and analysis to the legal and financial teams of both companies, enabling them to make more informed decisions and navigate the complexities of regulatory compliance and corporate governance.

In conclusion, the AI legalese decoder can play a crucial role in facilitating a smooth and legally compliant acquisition process for Capital One and Discover Financial Services, by providing comprehensive and accurate analysis of legal and regulatory documents, and enabling the companies to navigate the complexities of the deal in an efficient and informed manner.

(Reporting by Juveria Tabassum and Anirban Sen; Editing by Cynthia Osterman and Nick Zieminski)

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