Item 8.01 Other Events
As previously announced, on February 19, 2024, Capital One Financial Corporation, a Delaware corporation (“Capital One” or “the Company”), entered into an agreement and plan of merger (the “Merger Agreement”), by and among Capital One, Discover Financial Services, a Delaware corporation (“Discover”) and Vega Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”), pursuant to which (a) Merger Sub will merge with and into Discover, with Discover as the surviving entity in the merger (the “Merger”); (b) immediately following the Merger, Discover, as the surviving entity, will merge with and into Capital One, with Capital One as the surviving entity in the second-step merger (the “Second Step Merger” and together with the Merger, the “Mergers”); and (c) immediately following the Second Step Merger, Discover Bank (“Discover Bank”), a Delaware-chartered and wholly owned subsidiary of Discover, will merge with and into Capital One’s wholly owned national bank subsidiary, Capital One National Association (“CONA”), with CONA as the surviving entity in the bank merger (the “CONA Bank Merger,” and collectively with the Merger and the Second Step Merger, the “Transaction”).
In connection with the Transaction, Capital One previously disclosed certain unaudited pro forma condensed combined financial information and related notes under the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” in Amendment No. 1 to its Registration Statement on Form S-4, filed with the Securities and Exchange Commission (the “SEC”) on June 14, 2024, including, but not limited to: (i) unaudited pro forma condensed combined statements of income for the three months ended March 31, 2024 and the year ended December 31, 2023 and (ii) an unaudited pro forma condensed combined balance sheet as of March 31, 2024 (the information in this section, the “Prior Pro Forma Financial Information”).
This Current Report on Form 8-K (this “Report”) is being filed to update the Prior Pro Forma Financial Information in connection with recent developments, including, but not limited to, Discover’s recent announcement of Discover Bank’s entry into a Purchase Agreement with Santiago Holdings, LP, an Ontario limited partnership and an affiliate of each of Carlyle and KKR (“Santiago Holdings”), pursuant to which Discover Bank agreed to sell its private student loan portfolio to Santiago Holdings (the “Discover Student Loan Sale”), with Firstmark Services, a division of Nelnet Inc., assuming responsibility for servicing the portfolio upon the sale.
The consummation of the Transaction and the other transactions contemplated by the Merger Agreement are not conditioned on the consummation of the Discover Student Loan Sale.
To the extent that the information herein differs from or updates information previously disclosed in the Prior Pro Forma Financial Information, such information herein shall supplement and supersede the information previously disclosed.
Forward Looking Statements
Information in this communication, other than statements of historical facts, may constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements about the benefits of the Transaction between Capital One and Discover, the combined company’s plans, objectives, expectations and intentions, and other statements that are not historical facts. Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “targets,” “scheduled,” “plans,” “intends,” “goal,” “anticipates,” “expects,” “believes,” “forecasts,” “outlook,” “estimates,” “potential,” or “continue” or negatives of such terms or other comparable terminology.
All forward-looking statements are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Capital One or Discover to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others, (1) the risk that the cost savings and any revenue synergies and other anticipated benefits from the Transaction may not be fully realized or may take longer than anticipated to be realized, the risk that revenues following the Transaction may be lower than expected and/or the risk that certain expenses, such as the provision for credit losses, of Discover, or Capital One following the Transaction, may be greater than expected, (2) disruption to the parties’ businesses as a result of the announcement and pendency of the Transaction, (3) the risk that the integration of
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