[ad_1]
Pressure for major mergers and acquisitions could cause a major Capital One-Discover deal to collapse.
Mergers and acquisitions (M&A) are an essential part of an investment bank’s infrastructure, but the pressure to make big moves can result in the highest levels of loss for future business ventures.
Capital One and Discover’s blockbuster banking deal is one such merger facing intense pressure from advocacy groups to scrutinize the details.
The $35.3 billion deal will allow banking giant Capital One to absorb Discover Corp., one of the credit industry’s best-known assets, after a tumultuous 2023. But 30 advocacy groups are speaking out and calling for the Justice Department to intervene. .
The letter from the support group was postmarked March 21st and stated sternly: “Dear Chairman Powell, Acting Treasurer Sue, and Assistant Attorney General Cantor.
We will promptly initiate a full and transparent review of the proposed acquisition of Capital One Financial Corporation with the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Department of Justice. We request that you do so. Discover Financial Services provides ample opportunity for the public to participate in and comment on the proposed merger. ”
Capital One maintains trust
Capital One remains on track and expects the deal to close by the end of 2024, but the 30 authors of the letter ask for certain public compliance.
- The Fed and OCC should prohibit reasonable filing and expedited review of proposed mergers.
- The Fed and OCC should extend the public comment period by at least 60 days.
- The Fed and OCC should hold public hearings on the proposed merger.
- The Fed and OCC should disclose their pre-petition discussions with the merging parties.
- The Department of Justice will be required to fully evaluate proposed mergers under the 2023 Merger Guidelines.
- The Department of Justice should make the competitive factors report available to the public.
If the deal goes through, Capital One’s owner, Mr. MacLean, would become bigger than JPMorgan Chase and acquire one of the largest credit card companies in the United States. According to the New York Times, Capital One will quadruple its number of existing customers after absorbing an additional 305 million cardholders.
Discover released a statement in February regarding the acquisition, with Michael Rose, Discover’s new CEO and president, saying: “The transaction with Capital One brings together two strong brands with enhanced capabilities to accelerate growth and maximize shareholder value. Post-merger There are great benefits for the company.”
“This agreement highlights the strength of our business and is a testament to the hard work of Discover employees. As part of the Capital One family, we are building a bright future and providing even more opportunities for our loyal customers. I’m looking forward to doing it.”
Whether this move stalls or survives remains to be seen, but Captial One believes it will due to its dedicated approach to the formal application process made to the Office of the Comptroller of the Currency on the same day as the letter from There is. Advocacy groups contacted Federal Reserve Chairman Jerome Powell, Acting Comptroller of the Currency Sue, and Assistant Attorney General Cantor of the Justice Department’s Antitrust Division.
Image: Pexel.
The post Calling for advocacy group scrutiny of Capital One and Discover deal appeared first on Due.
[ad_2]
Source link
