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Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, said she is “deeply opposed” to Capital One’s (NYSE:COF) planned $35 billion acquisition of Discover Financial Services (NYSE:DFS).
“A merger of Capital One and Discover would result in a $625 billion bank, which is larger than the combined size of the three banks that failed last year, Silicon Valley Bank, Signature Bank, and First Republic,” Waters said in a statement, according to a Bloomberg report.
Waters comments come after Sen. Elizabeth Warren (D-MA) on Tuesday said she also wanted regulators to block the transaction.
“This Wall Street deal is dangerous and will harm working people. Regulators must block it immediately,” Warren said in a posting on X less than 24 hours after the companies confirmed the deal.
Capital One (COF) confirmed on Monday that it agreed to acquire Discover Financial Services (NYSE:DFS) in a stock-based deal valued at $35.3B, which will create the largest U.S. credit card company by loan volume.
Analysts expect regulators will give the transaction a close look as it has been years since there’s been a bank merger this big, excluding forced acquisitions of failing banks. At Dec. 31, the two companies had a total of $257B of credit card loans outstanding, exceeding J.P. Morgan Chase’s (JPM) $211B.
“Regulatory approval is a concern as the deal is expected to close late 2024/early 2025,” Oppenheimer’s Dominick Gabriele wrote in a note. However, he thinks regulators may prefer Capital One (COF) to handle Discover’s (DFS) compliance issues.
