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Capital One agrees to buy Discover Financial for $35bn

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Capital One agrees to buy Discover Financial for bn

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US lender Capital One has agreed to buy rival Discover Financial for $35.3bn, in an all-stock tie-up that is set to unite two of America’s largest credit card companies.

Capital One’s acquisition of Discover values its smaller rival’s stock 27 per cent above Friday’s closing price. Under the terms of the deal, Discover shareholders would receive 1.0192 Capital One shares for each of theirs.

“Through this combination, we’re creating a company that is exceptionally well-positioned to create significant value for consumers, small businesses, merchants and shareholders as technology continues to transform the payments and banking marketplace,” said Richard Fairbank, founder and chief executive of Capital One.

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The merger between Virginia-based Capital One and Illinois-based Discover would shake up the US credit card landscape and mark one of the industry’s biggest deals since the 2008 financial crisis. 

Capital One and Discover, are two of the biggest credit card lenders, behind JPMorgan Chase and Citigroup. Discover also offers a payment network, making it a competitor with the likes of Visa and Mastercard.

The last big merger between two banks occurred almost five years ago, when regional lender BB&T bought SunTrust for about $28bn in a $66bn deal, forming Truist.

Consolidation in the highly fragmented US banking sector has long been expected but several large players have struggled to successfully integrate and capture the synergies hoped for when two rivals combine.

Capital One and Discover said on Monday that the transaction is expected to generate expense synergies of $1.5bn in 2027 and deliver a return on invested capital of 16 per cent in 2027.

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The potential deal comes at a time when US regulators are planning to reform bank merger rules in an effort to boost transparency and increase scrutiny of deals.

A Capital One acquisition of Discover is likely to be examined carefully by US antitrust regulators given the large size of the two companies’ credit card businesses.

The companies said they expected the deal to close by late 2024 or early 2025.

After a weak year for dealmaking in 2023 partly due to tougher antitrust enforcement and high interest rates, recent months have seen a resurgence in megadeals as chief executives become more confident that they can complete transactions.

Over the past few months ExxonMobil agreed to acquire shale group Pioneer Natural Resources for $60bn, Chevron reached a deal to buy Hess for $53bn and chip design toolmaker Synopsys announced the takeover of engineering software maker Ansys for $35bn.

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Capital One, known in America for its “What’s in your wallet?” advertising slogan delivered by celebrities such as Samuel L Jackson and Jennifer Garner, is the 12th-biggest US bank by assets.

It was one of several lenders that came under pressure following the collapse of Silicon Valley Bank in March last year.

Capital One’s stock has since recovered, boosted in part by Warren Buffett’s Berkshire Hathaway taking an almost $1bn stake.

Discover announced in December that it had appointed former TD Bank executive Michael Rhodes as its chief executive, months after the sudden departure of the company’s former boss Roger Hochschild.

Credit card lenders saw very low delinquency rates following government stimulus programmes during the Covid-19 pandemic but have warned that consumers are gradually spending down much of their excess savings.

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Crowds ordered to evacuate National Mall area as stormy weather slams DC

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Crowds ordered to evacuate National Mall area as stormy weather slams DC

The thousands of people attending the Great American State Fair and other areas around the National Mall are being ordered to evacuate as stormy weather approaches.

The National Weather Service previously announced a Severe Thunderstorm Warning in the District. Officials are asking attendees to seek shelter.

SEE ALSO: Historic Fourth of July fireworks to light up National Mall: How to watch live

The DC Homeland Security & Emergency Management released a list of places where the crowds can go to get out of the weather:

Federal Buildings:

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  • Ronald Reagan Building – 100 Pennsylvania Ave NW
  • Dept. of Commerce – 1401 Constitution Ave NW
  • Dept. of Agriculture – 1400 Independence Dr SW
  • Dept. of Education – 400 Maryland Ave SW
  • Internal Revenue Service – 1111 Constitution Ave NW
  • Voice of America – 330 Independence Ave SW
  • Thomas Jefferson Memorial – 16 E Basin Dr SW

Museums:

  • National Museum of American History – 1300 Constitution Ave NW
  • National Museum of Natural History – 1000 Constitution Ave NW
  • National Museum of African American History and Culture – 1400 Constitution Ave NW

Freedom 250 organizers released this statement:

“The safety of our guests, performers, and staff is our top priority. Due to approaching severe storms, Freedom 250, United States Secret Service, United States Park Police, National Park Service, the Federal Emergency Management Agency, and all public safety partners are asking all guests to evacuate event grounds and seek temporary shelter in a nearby building. Available shelter locations include the Department of Commerce, Department of Education, Department of Agriculture, Internal Revenue Service, VOA Building, Thomas Jefferson Memorial, National Museum of American History, National Museum of Natural History, the African American Museum, and the Ronald Reagan Building. Please remain calm, follow the directions of law enforcement and event staff, and stay tuned to Freedom 250’s official channels for updates. Freedom 250 will share updates on programming and doors reopening — please stay close to our official channels for updates.”

The Secret Service said they have suspended screening on the National Mall.

“Security screening on the National Mall has been suspended due to dangerous storms,” the Secret Service said. “If you are already on the grounds, follow directions from officers and event staff and move to shelter immediately. Do not shelter under trees.”

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Metro riders are also asked to seek shelter. Commuters should expect heavy crowds at stations near the National Mall and are asked to consider using L’Enfant Plaza, Metro Center, Archives, Federal Triangle or Federal Center SW stations to avoid congestion.

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Reflections on America’s 250th birthday

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Reflections on America’s 250th birthday

The nation’s capital may be the focal point of the 250th Independence Day celebration, but people all across America have plans to mark the occasion, from boisterous public parades to quiet personal reflections on history.

Julia Demaree Nikhinson/AP


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Julia Demaree Nikhinson/AP

As the United States turns 250 years old, Americans across the country are spending the holiday thinking about what the big birthday means to them, with reflections and celebrations as diverse as the nation itself.

NPR’s member station reporters fanned out to collect snapshots of the occasion from sea to shining sea.

In one ‘City of Presidents,’ Main Street is decorated for a party

At least two cities in the U.S.call themselves the “City of Presidents” and Cuba City, in Wisconsin, is one of them, largely due to its patriotic Main Street decorations. Every year from Memorial Day through Veteran’s Day, red, white, and blue shields, one for each U.S. president, are prominently displayed high up on the light poles lining Main Street.

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It’s a tradition that began in 1976 to commemorate the country’s bicentennial, says Donna Rogers, who is president of the ongoing project but admitted that when it first started, she wasn’t particularly tuned-in to the display.

“I was raising three little boys and working at John Deere, so I didn’t really pay too much attention to community service at that time,” she said.

Donna Rogers shows off one of Cuba City's presidential lampposts.

Donna Rogers shows off one of Cuba City’s presidential lampposts.

Susan Bence/WUWM


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Susan Bence/WUWM

A few years later, she was tapped to help keep the initiative alive.

When she thinks of the country’s history, she says the signing of the Declaration of Independence and abolition of slavery top her list, plus a current event–

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“Of course, now, our nation’s 250th birthday. I think those three would be the three most important things in history to me,” she said, quickly adding “[the] right for women to vote, don’t forget that, right?”

Rogers and Cuba City are pulling out all the stops for the 250th, with a parade and a mac-and-cheese festival, because “that was some of our founding fathers favorite foods, along with turkey and cranberries and other items.”

She laughed and admitted she googled that. True or not, Rogers says they’ll go all-out to celebrate the 250th in her “City of Presidents”.

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Family-owned company prepares to put on the largest fireworks display in history: “It is the biggest show that we’ve ever done”

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Family-owned company prepares to put on the largest fireworks display in history: “It is the biggest show that we’ve ever done”

Washington — There are fireworks, and then there’s what’s in store for Saturday in Washington, D.C.

When the sun goes down on Independence Day, the skies of Washington are expected to fill with a record-setting 850,000 individual fireworks for a 40-minute spectacle like no one has seen before.

A company called Pyrotecnico will attempt the biggest fireworks show in history, using five generations of family know-how and a background in Super Bowls and large musical acts to help America celebrate its 250th birthday with a bang.

“I mean, it is the biggest show that we’ve done,” Rocco Vitale, president of Pyrotecnico, told CBS News. “…My earliest memories of fireworks displays and doing the Fourth of July was here.”

Pyrotecnico has been planning this year’s show since January, using computers to simulate the display. But now it’s time for the real thing.

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Vitale gave CBS News an exclusive look at his not-so-secret weapons: eight barges out on the Potomac River, each one ready to light up the night sky.
 
“Each firing location has a communication device, and its all set on GPS. And once the time of the show is put into the system, it goes at that time,” Vitale explained.

According to Freedom 250, the organizer of the “Salute to America 250 Celebration & Fireworks” on the National Mall, President Trump will deliver remarks at 9:45 p.m. Eastern Time, and the fireworks display will get underway at 10:45 p.m. The event is expected to draw hundreds of thousands of people.


Join CBS for “The Great American Block Party 250,” a primetime special on Saturday, July 4, hosted by CBS Evening News anchor Tony Dokoupil and Entertainment Tonight’s Nischelle Turner, featuring live musical performances, celebrations around the country, and the largest fireworks show in history in the skies over the nation’s capital. Tune in July 4 at 8 p.m. ET on CBS and stream it on Paramount+ and CBS News 24/7.

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