Capital One Financial has agreed to acquire Discover Financial Services in an all-stock transaction valued at $35.3 billion, creating the largest credit card company in the United States by loan volume.

The deal would combine Capital One's lending expertise with Discover's payment network, giving the combined company a powerful competitive position against Visa, Mastercard, and American Express.

Under the terms of the agreement, Discover shareholders will receive 1.0192 Capital One shares for each Discover share, representing a 26% premium to Discover's closing price.

The transaction is expected to close in late 2024 or early 2025, subject to regulatory approval.