Capital One, a Warren Buffett-backed consumer bank and credit card issuer, will acquire the credit card lender Discover Financial Services, according to a report by The Wall Street Journal that cited people familiar with the matter.
Capital One has been working with advisers to "study a deal" to buy Discover and a deal could be announced as soon as Tuesday, per the Journal's report. Bloomberg reported earlier Monday that Capital One was considering making an offer for Discover.
Discover has a market value of roughly $28 billion and the Journal reported that an acquisition would be expected to value it at a premium beyond that valuation.
In January, Discover and Capital One reported declines in fourth-quarter profits of 62% and 43%, respectively, as banks increased provisions for losses from bad loans as rising interest rates raised the risk of consumer defaults on credit card debt and mortgages.
Capital One is reportedly considering the acquisition of Discover. (Capital One: Craig Warga/Bloomberg via Getty Images | Discover: Tiffany Hagler-Geard/Bloomberg via Getty Images / Getty Images)
This is a developing story. Please check back for updates.
Reuters contributed to this report.