Goldman Sachs to buy Capital One Financial Corp for £1.94 billion.

According to the Wall Street Journal, Goldman Sachs Group Inc. (NYSE: GS) will purchase Capital One Financial Corp (NYSE: COF) for roughly £1.94 billion. The report also said that the British multinational investment bank, Barclays plc, was also interested in buying General Motors’ credit card issuer, but lost the bid against Goldman Sachs on Wednesday.

Goldman Sachs was seen trading about 0.5% up in premarket trading on Wednesday. Shares of the company are now trading at £156.39 per share that translates to a little under 15% decline in 2020 so far. Goldman Sachs had plummeted to an even lower £105 per share in late March. At the time of writing, the New York-based financial services company has a market capitalisation of £53.81 billion and a price to earnings ratio of 15.30.

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The deal is expected to finalise in the upcoming weeks

Goldman Sachs and Capital One have come to terms on the purchase price. The deal is now likely to close in the upcoming weeks. The U.S. investment bank published its earnings report for the fiscal second quarter in mid-July that came in stronger than what experts had forecast.

Following the completion of the transaction, Goldman Sachs will have a new avenue to further expand its footprint in consumer banking, to offset volatility in its other segments, including trading and investment banking.

Goldman’s presence in consumer banking is relatively smaller as compared to its rivals like Citigroup Inc and JPMorgan Chase. But CEO David Solomon has been increasingly focusing on strengthening the bank’s position in this segment.

Goldman Sachs partnered with Apple Inc in 2019

The Capital One acquisition marks Goldman’s 2^nd prominent credit card partnership. It collaborated last year with Apple Inc. over the launch of the latter’s dedicated credit card to be used with Apple Pay and Apple devices.

Goldman Sachs and General Motors are yet to make an official statement on the news.

Capital One remained almost flat in premarket trading on Wednesday. The American bank holding company now has a per-share price of £58.80 versus a much £32.87 per share in the first week of April. Capital One had started the year 2020 at a much higher per-share price of £80.58 in the stock market.

At the time of writing, the McLean-based company that specialises in credit cards, auto loans, banking, and savings account has a market cap of £26.86 billion.