Capital One & Discover Shareholders Approve $35.3B Merger, But Regulatory Challenges Remain

Shareholders of both Capital One and Discover have overwhelmingly approved the companies' proposed $35.3 billion merger in separate meetings on Tuesday, reports BankingDive. More than 99% of shares voted in favor of the acquisition, according to a statement from Capital One.

While shareholder approval was expected, regulatory hurdles remain. The Federal Reserve and the Office of the Comptroller of the Currency have yet to weigh in, and spokespeople for these agencies have not commented on the matter. The Delaware State Bank Commissioner, however, approved the acquisition in December. The deal is expected to be finalized early this year, though the timeline remains uncertain. Discover recently projected a completion date of May 19, revising its earlier estimate of February 19.

Opposition to the merger is mounting. Three lawsuits have been filed arguing that reduced competition could lead to higher prices for consumers. Additionally, the New York Attorney General’s office is investigating potential antitrust violations. Consumer advocates worry that the combined entity, which would control roughly one-third of the subprime credit card market, could drive up costs for lower-income users.

Despite these concerns, Capital One and Discover maintain that competition in the industry will remain strong and that the deal will not lead to price increases. If completed, the merger would create the largest credit card issuer in the U.S., reshaping the financial landscape.