V - Why Capital One-Discover Merger Is A Threat To Visa Mastercard: Creation Of New Credit Card Giant | Benzinga
The $35 billion takeover of Discover Financial Services (NYSE:DFS) by Capital One Financial Corp (NYSE:COF) creates the U.S.’ biggest credit card operator, and a major headache for rivals Visa Inc (NYSE:V) and Mastercard Inc (NYSE:MA).
The synergies created are what drove the deal. Capital One now has a credit card network of its own and, if it chooses, can move its cards issued on the Visa and Mastercard networks to that of Discover.
Capital One, however, has recently negotiated renewed partnerships with both Visa and Mastercard, so the transition will be some time in the making.
Market Share And Synergies
In the U.S. alone, the deal ensures Capital One nearly a quarter of the market, according to Goldman Sachs analysts.
Lead analyst Ryan Nash said that the synergies of the combined group would equate to cost savings for Capital ...