Capital One 2011 Annual Report Download - page 22

As part of our evaluation, we analyze the values of, and regularly submit bids for, the acquisition of customer
accounts and other liabilities and assets of financial institutions and other businesses. We also regularly consider
the potential disposition of certain of our assets, branches, partnership agreements or lines of businesses. We may
issue equity or debt in connection with acquisitions, including public offerings, to fund such acquisitions. Recent
completed or pending acquisitions are discussed below.
Hudson’s Bay Company—Credit Card Portfolio
On January 7, 2011, we acquired the existing credit card loan portfolio of Hudson’s Bay Company (“HBC”), one
of the largest retailers in Canada, from GE Capital Retail Finance. The acquisition included outstanding credit
card loan receivables with a fair value of approximately $1.4 billion and the transfer of approximately 400
employees directly involved in managing HBC’s loan portfolio. The acquisition and partnership with HBC
significantly expand our credit card customer base in Canada, tripling the number of customer accounts, and
provide an additional distribution channel.
Kohl’s—Credit Card Portfolio
In August 2010, we entered into a private-label credit card partnership agreement with Kohl’s Department Stores
(“Kohl’s”). In connection with the partnership agreement, we acquired Kohl’s existing private-label credit card
loan portfolio from JPMorgan Chase & Co. on April 1, 2011. The existing portfolio, which consists of more than
20 million Kohl’s customer accounts, had an outstanding principal and interest balance of approximately $3.7
billion at acquisition. Under the terms of the partnership agreement and in conjunction with the acquisition, we
began issuing Kohl’s branded private-label credit cards to new and existing Kohl’s customers on April 1, 2011.
The partnership agreement has an initial seven-year term and an automatic one-year renewal thereafter unless
either party delivers notice of an intent to terminate.
ING Direct
On June 16, 2011, we entered into a purchase and sale agreement with the ING Sellers to acquire ING Direct. On
February 17, 2012, we closed the acquisition of ING Direct, which included (i) the acquisition of the equity
interests of ING Bank, fsb (“ING Bank”), (ii) the acquisition of the equity interests of each of WS Realty, LLC
and ING Direct Community Development LLC and (iii) the acquisition of certain other assets and the assumption
of certain other liabilities of ING Direct Bancorp. The aggregate consideration was 54,028,086 shares of
common stock and approximately $6.3 billion in cash. The ING Direct acquisition consists of assets, which
include cash and cash equivalents, investment securities and loans with a total estimated fair value of $92.2
billion as of December 31, 2011 and deposits of approximately $83.0 billion as of December 31, 2011.
HSBC—U.S. Credit Card Business
In August 2011, we entered into a purchase agreement with HSBC Finance Corporation, HSBC USA Inc. and
HSBC Technology and Services (USA) Inc. (collectively, “HSBC”), to acquire substantially all of the assets and
assume liabilities of HSBC’s credit card and private-label credit card business in the United States for a premium
estimated at $2.6 billion as of June 30, 2011. We expect the acquisition of the HSBC U.S. credit card business to
significantly expand and enhance our Credit Card franchise. We currently expect the HSBC acquisition to close
in the second quarter of 2012, subject to customary closing conditions, including certain governmental clearances
and approvals. Pursuant to the purchase agreement, we have the option, subject to certain conditions, to pay up to
$750 million of the consideration to HSBC in the form of our common stock (valued at $39.23 per share).
Additional Information
Our common stock is listed on the NYSE and is traded under the symbol “COF.” As of January 31, 2012, there
were 15,242 holders of record of our common stock. Our principal executive office is located at 1680 Capital
One Drive, McLean, Virginia 22102 (telephone number [phone]). We maintain a Web site at
www.capitalone.com. Documents available on our Web site include: (i) our Code of Business Conduct and Ethics
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