(This Feb. 22 story has been corrected to change ‘any circumstances’ to ‘certain circumstances,’ in paragraph 1)
(Reuters) – Discover Financial Services or Capital One Financial will pay a termination fee of $1.38 billion if the merger of the firms falls through under certain circumstances, a regulatory filing showed on Thursday.
The all-stock deal announced on Monday would create the biggest U.S. credit card issuer, but it would also give Capital One access to Discover’s payment network, allowing it to rely less on payments giants Visa and Mastercard.
Capital One, the third-largest issuer of Visa and MasterCard credit cards in the United States, said earlier in the week, shifting its card portfolio from those two payment giants to Discover’s network would help it generate $1.2 billion in 2027.
(Reporting by Pritam Biswas in Bengaluru; Editing by Maju Samuel and Shailesh Kuber)
