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Discover and Snychrony will be acquired sometime over the next 24 mos

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Valued Member

Discover and Snychrony will be acquired sometime over the next 24 mos

That’s my prediction! Discover would be attractive based on its global payments and network to a large bank who could leverage the asset to increase profitability of its card units.  Wells Fargo is desperate to grow its card business. If they can get around the FEDS I’d say they are the likely candidate. 

 

I think synchrony’s access to capital will come under pressure and therefore impact growth.  Plus with all the headwinds in retail they will need deep pockets sooner of later. I could see Citi making a play here. Retail cards are in their wheelhouse and it doesn’t seem to be a business that chase or B of A find of interest.  One might say Cap One but I also think they will might be on the block in about 5 years.  

 

I also think Barclays will ditch the US operation.  

Message 1 of 20
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Frequent Contributor

Re: Discover and Snychrony will be acquired sometime over the next 24 mos

So youre saying should apply for that Discover job...
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Message 2 of 20
Valued Member

Re: Discover and Snychrony will be acquired sometime over the next 24 mos

I think Discover would fit nicely within Wells Fargo with little reduction in force.  However, if they can’t get their act together in time I could see a Goldman Sachs swooping in to grab discover first. Which actually might be great for Goldman and it’s whole approach to cards, apple card etc 

Message 3 of 20
Super Contributor

Re: Discover and Snychrony will be acquired sometime over the next 24 mos

And not one of these moves would be good for the consumer.


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Message 4 of 20
New Contributor

Re: Discover and Snychrony will be acquired sometime over the next 24 mos

As a sharehold of DFS and SYF stock and someone who also banks with Discover I really hope your fantasy never comes to pass.  



Message 5 of 20
New Contributor

Re: Discover and Snychrony will be acquired sometime over the next 24 mos


@SEBanker wrote:

I think Discover would fit nicely within Wells Fargo with little reduction in force.  However, if they can’t get their act together in time I could see a Goldman Sachs swooping in to grab discover first. Which actually might be great for Goldman and it’s whole approach to cards, apple card etc 


Wells Fargo would have to get a lot of shares from Vanguard and Blackrock to outright buy Discover Financial Services and not to mention Morgan Stanley who owned Discover and decided to spin it off as it's own seperate company which I'm sure Morgan Stanley still owns quite a large amount of shares in.  If Anything Morgan Stanley buying Discover back would make more sense then Wells Fargo.  

Message 6 of 20
Moderator Emeritus

Re: Discover and Snychrony will be acquired sometime over the next 24 mos

This thread has caught my eye. As other posters have stated, there may be some interesting potential partners for Discover and Synchrony. My concern is I am doubtful the consumer would be better for such combinations.

One thing is for sure, Wall Street is about money and as long as the consumer spends everyone doesn't really care! Smiley Sad

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Message 7 of 20
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Valued Contributor

Re: Discover and Snychrony will be acquired sometime over the next 24 mos

Discover? No way..... 

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Message 8 of 20
Moderator Emeritus

Re: Discover and Snychrony will be acquired sometime over the next 24 mos


@pinkandgrey wrote:

Discover? No way..... 


Same response I had but, when we look at what Discover has been doing over the last many months (essentially gutting their card products benefits along with Discover Deals), one may wonder if they are establishing a lean mean profitable machine that would fetch a good price to investors on the open market?! Great for some of those who like to buy and gut the assets once acquired. In my mind that scenario is not for Discover but ...? Smiley Sad

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Message 9 of 20
New Contributor

Re: Discover and Snychrony will be acquired sometime over the next 24 mos

I would say them cutting back benefits and and especially discover deals is due to how much it was costing them.  If you used discover deals for all or most of your online shopping in your first year of having the Discover It card and plus used it as your general spend card and were maxing out or close to maxing out the rotating categories getting over a $1,000 cashback match if not thousands in cashback match was possible to do.  Not to mention certain merchants might have not liked discover deals for example Walmart has it's own retail credit card that gives 3% cashback on walmart.com however if you were using discover deals you were getting 5% cashback shopping on walmart.com and if it's your first year with the discover it card it was 10% cashback on walmart.com.  So that begs the question to the intelligent shopper who would order off walmart.com "why get the 3% walmart credit card when I can get the 5% or 10% Discover It card?".  Overall it was probably just costing Discover to much so that's why they got rid of it.  

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