8-KMaterial AgreementsExhibits & Filings

CAPITAL ONE FINANCIAL CORP 8-K Report, Material Agreement (Jun 22, 2011)

Filed June 22, 2011For Securities:COFCOF-PLCOF-PICOF-PKCOF-PNCOF-PJ

Summary

Capital One Financial Corporation (COF) has announced a significant acquisition, entering into a Purchase and Sale Agreement on June 16, 2011, to acquire substantially all of ING Direct's U.S. business. This transaction, valued at approximately $6.2 billion in cash and 55,921,710 shares of COF common stock, represents a major expansion for Capital One, particularly in the online banking and direct lending sectors. The acquisition is subject to customary closing conditions, including crucial regulatory approvals, the completion of certain related transactions (IABF Transactions), and the execution of ancillary agreements. The deal structure includes restrictions on the Sellers (ING entities) operating similar businesses in the U.S. for five years post-closing, and limitations on Capital One's international online deposit-taking activities. A Shareholders Agreement will also be executed, granting the Sellers a board seat under certain conditions and imposing restrictions on the resale of the acquired shares.

Key Highlights

  • 1Capital One Financial Corporation is acquiring substantially all of ING Direct's U.S. business.
  • 2The total transaction value is approximately $6.2 billion in cash plus 55,921,710 shares of Capital One common stock.
  • 3The acquisition is subject to customary closing conditions, including required regulatory approvals.
  • 4An Illiquid Assets Back-up Facility (IABF) will be replaced with cash prior to closing, with no additional cost or ongoing obligations for Capital One.
  • 5Post-closing restrictions are in place for both parties, limiting competitive business operations for a defined period.
  • 6ING entities will have the right to designate one nominee to Capital One's board of directors post-closing, subject to certain conditions.
  • 7A termination fee of $270 million may be payable by Capital One under specific circumstances related to regulatory approval failures.

Frequently Asked Questions

Capital One is acquiring substantially all of ING Direct's U.S. business, which includes its direct banking operations and related assets and liabilities.

The total transaction value is approximately $6.2 billion in cash, combined with 55,921,710 shares of Capital One's common stock. There are provisions for cash substitution for shares if a certain ownership threshold is exceeded.

Key conditions include obtaining necessary regulatory approvals without burdensome conditions, the completion of the IABF Transactions (replacing a facility with cash), accuracy of representations and warranties, and the execution of ancillary agreements like the Shareholders Agreement.

ING entities will have the right to nominate one director to Capital One's board until certain conditions are met (e.g., one year post-closing or if they sell more than 33% of the shares). Additionally, there are restrictions on ING operating similar businesses in the U.S. for five years post-closing.