Capital One buying Discover would create the largest credit card company in the US by loan volume. Yep, it would be bigger than Visa or Mastercard, which has been a duopoly for years. Whether this $35B merger will pass anti-trust scrutiny remains to be seen. The combined company would become a giant, vertically integrated consumer financial services company, like Amex.

Capital One to Buy Discover for $35 Billion in Year's Biggest Deal

"(Bloomberg) -- Capital One Financial Corp. agreed to buy Discover Financial Services in a $35 billion all-stock deal to create the largest US credit-card company by loan volume, giving the combined entity a stronger foothold to compete with Wall Street’s behemoths.

The purchase of Discover ranks as the world’s biggest merger this year. It will bring together two storied consumer-finance brands, a combination that will surpass rivals JPMorgan Chase & Co. and Citigroup Inc. by US credit-card loan volume, according to data compiled by Bloomberg Intelligence. The deal will also give Capital One a foundation in the world of payment networks.

Historically, Capital One has had to rely on Visa Inc. or Mastercard Inc. to issue its credit cards. With Discover in hand, the company would be able to cut out those two middlemen and have more control over the prices merchants are charged each time a consumer swipes one of the firm’s cards at checkout."

finance.yahoo.com - Capital one weighs acquisition discover