There’s a noisy bar in London where punters are so eager to collect their points that the staff have scrawled “NO AMEX” in marker pen on every card reader. That’s very much the sentiment today, as Capital One and Discover Financial team up to take on their credit card rivals. The price tag? $35 billion, which would earn you almost enough points for a flight to Europe.

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Capital One is acquiring Discover in a deal worth $35 billion

Two of America’s biggest credit card companies are combining. Capital One has agreed to buy rival Discover Financial for $35.3 billion. The deal values Discover at 27% above Friday’s closing price. Capital One and Discover say the deal is expected to generate expense synergies of $1.5 billion in 2027, with a 16% return on invested capital in 2027.

It’s one of the US banking industry’s biggest deals since the 2008 financial crisis. Consolidation has been expected, but few have been able to find a deal that unlocks the necessary synergies. The last big merger between two banks happened almost five years ago when BB&T bought SunTrust for about $28 billion to form Truist.

The potential deal between Capital One and Discover comes ahead of planned reform of bank merger rules. The transaction is likely to face detailed scrutiny from US antitrust regulators, especially given the large size of the two companies’ credit card businesses.

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The bottom line