Capital One to Buy Regional Bank Hibernia for $5.3 Bln

Capital One Financial Corp., a top credit card issuer, on Sunday said it agreed to buy Hibernia Corp. in a cash and stock deal worth about $5.3 billion, moving to expand into retail operations.

McLean, Virginia-based Capital One, one of the largest issuers of MasterCard and Visa credit cards, said it would pay $33 a share for New Orleans-based Hibernia, a retail bank with about 300 branches in Louisiana and Texas.

Capital One said the deal, which was approved by the boards of both companies, will give $15.35 in cash and 0.2261 of a Capital One share for each Hibernia share. The cash component of the deal is about $2.4 billion, said Capital One.

Capital One has said for several years that it was interested in acquiring a commercial bank to expand its range of customer services, which includes major credit card and auto-financing businesses. The Hibernia deal gives it a platform for growth, particularly in the fast-growing Texas market, the companies said.

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