CAPITAL ONE FINANCIAL acquisition history

Capital One acquired Discover Financial Services in an all-stock merger structured as a two-step merger followed by a bank merger of Discover Bank into Capital One, National Association. The deal added Discover's card-issuing business and, critically, its proprietary Discover, PULSE, and Diners Club International payment networks, giving Capital One a vertically integrated card-and-network platform. Capital One shareholders held roughly 60% and Discover shareholders roughly 40% of the combined company at close. ~$35.3 billion (all-stock; each Discover share exchanged for 1.0192 Capital One shares, a 26.6% premium to Discover's $110.49 close on Feb 16, 2024).

This deal brings together two innovative, mission-driven companies that together are poised to deliver breakthrough products and experiences to consumers, businesses, and merchants.Richard D. Fairbank — Founder and CEO, Capital One

Capital One acquired the U.S. credit card and private-label credit card business of HSBC Finance Corporation, HSBC USA Inc. and HSBC Technology and Services (USA) under a Purchase and Assumption Agreement, excluding the HSBC Bank USA consumer credit card program and certain retained assets. At close the company acquired about $28.2 billion of credit card receivables plus roughly $0.6 billion of other net assets for approximately $31.3 billion in cash, which included a premium of about $2.5 billion on the receivables. The original agreement priced the premium at 8.75% of receivables. ~$31.3 billion cash aggregate consideration at close (acquired ~$28.2 billion of credit card receivables; included a ~$2.5 billion premium; original 8.75% premium terms).

Capital One merged North Fork Bancorporation into Capital One, with Capital One as the surviving corporation, in a stock-and-cash transaction the company valued at about $13.2 billion at close. North Fork, headquartered in New York, provided deposit and lending services to consumer, commercial and small-business customers, and made Capital One the third-largest retail depository institution in the metro New York region and, at the time, roughly the 11th-largest U.S. bank by deposits. ~$13.2 billion stock and cash (at close; ~$14.6 billion at announcement).

The combination of Capital One and North Fork brings together the strengths of national lending and local banking.Richard D. Fairbank — Chairman and CEO, Capital One

This transaction is about maintaining the continuity of the great business model and customer relationships that North Fork has built.John Kanas — Chairman, President and CEO, North Fork Bancorporation

Capital One acquired substantially all of ING Groep's ING Direct business in the United States under a Purchase and Sale Agreement, taking the equity of ING Bank, fsb and related entities plus certain assets and liabilities. The consideration was $6.3 billion in cash and roughly 54 million Capital One shares (about a 9.7% ownership stake) at close. ING Direct, headquartered in Wilmington, Delaware, was the largest direct bank in the country with nearly $83.0 billion in deposits and over 7.6 million customers, making Capital One the leading direct bank and sixth-largest depository institution in the U.S. ~$9 billion ($6.3 billion cash + ~54 million Capital One shares, ~9.7% stake, at close; announced as $6.2 billion cash + 55,921,710 shares).

We expect the ING Direct acquisition will deliver compelling financial results in the near-term, and enhance our ability to deliver sustained value over the long-term to our customers, our communities, and our shareholders.Richard D. Fairbank — Chairman and CEO, Capital One

Capital One merged Hibernia Corporation into Capital One, making Hibernia National Bank a subsidiary, in a stock-and-cash transaction valued at about $4.9 billion at close. Hibernia, one of the largest banking companies headquartered in the Gulf South, offered deposit, consumer, commercial, small-business, mortgage, private banking, trust, brokerage and insurance services across Louisiana and a growing Texas franchise. The deal was Capital One's entry into retail branch banking and made it the nation's ninth-largest consumer lender at the time. ~$4.9 billion stock and cash (at close; consideration set at $15.35 plus 0.2261 Capital One share per Hibernia share, subject to proration).

The combination of Capital One and Hibernia brings together the strengths of national scale consumer lending and local scale banking.Richard D. Fairbank — Chairman and CEO, Capital One

Capital One agreed to acquire approximately $8.5 billion of healthcare-related loans and General Electric Capital Corporation's Healthcare Financial Services business, one of the leading capital providers in the U.S. healthcare market, at a 6% premium to par value of the receivables. The unit provided customized financing to healthcare services, seniors housing, hospitals, medical offices, pharmaceutical and medical-device companies. Combined with Capital One's existing healthcare banking, it formed Capital One Healthcare with over $11 billion in total outstanding balances. ~$8.5 billion of healthcare-related loans acquired for a 6% premium to par value (as of Jun 30, 2015).

Capital One acquired Chevy Chase Bank under a Stock Purchase Agreement with B.F. Saul Real Estate Investment Trust and affiliates, in a cash-and-stock transaction valued at approximately $520 million at announcement. Chevy Chase added about $11 billion of deposits (roughly $13 billion at close) and the largest branch and ATM network in the Washington, D.C. region, where Capital One was already the largest retail depository institution. Capital One recorded a $1.75 billion net credit mark on Chevy Chase's loan portfolio. ~$520 million at announcement ($445 million cash + 2.56 million Capital One shares); ~$475.9 million total value at close.

Chevy Chase is a great strategic fit for Capital One and the combination of our two banks is economically compelling. Chevy Chase provides an opportunity to acquire a well-run retail bank with local scale in one of the best local banking markets in the U.S.Richard D. Fairbank — Chairman and CEO, Capital One

Capital One acquired Onyx Acceptance Corporation, an independent auto-finance company, in an all-cash deal at $28.00 per share for about $191 million, completed in January 2005. Onyx originated roughly $2.5 billion in auto loans in the twelve months ended June 30, 2004 through more than 12,000 active dealer relationships. Folding Onyx into Capital One Auto Finance expanded dealer coverage and coast-to-coast penetration and created what was then the second-largest independent auto lender in the U.S. by annual originations. (No dedicated Capital One 8-K; deal value from contemporaneous trade-press reporting.). ~$191 million ($28.00 per share, all cash).

Capital One acquired Beech Street Capital, a privately held national originator, underwriter and servicer of multifamily commercial real estate loans through Fannie Mae, Freddie Mac and FHA programs. Founded in 2009 and headquartered in Bethesda, Maryland, Beech Street originated about $4 billion of loans in 2012 (the sixth-largest agency originator that year) and brought a roughly $10 billion commercial-mortgage servicing portfolio. The deal made Capital One a top-five national multifamily originator. Terms were not disclosed. Not disclosed (acquired ~$10 billion commercial-mortgage servicing portfolio).

The combination of Capital One's multifamily business and Beech Street will make us a top 5 national multifamily originator.Rick Lyon — Head of Commercial Real Estate Banking, Capital One