(Bloomberg) — Donald Trump’s return to the White House is poised to assuage lingering doubts about whether Capital One Financial Corp. will be cleared. to take over Discover Financial Services, one of the largest mergers announced this year.

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A Republican president would bode well for the $35 billion deal that would create the largest credit card issuer in the United States by loan volume. The reconciliation is awaiting approval from the Federal Reserve and the Office of the Comptroller of the Currency. The US Department of Justice could then take legal action to block it. The deal is expected to be finalized early next year, Capital One said.

“The re-election of former President Donald Trump likely removes the last significant hurdle for Capital One to acquire Discover – approval from the Justice Department,” Jennifer Rie, an analyst at Bloomberg Intelligence, said in a research note Wednesday. “A Trump DOJ is much less likely to challenge this combination, when most of the potential hurdles on the regulatory side have already been cleared.”

Shares of Capital One and Discover jumped 19% and 24%, respectively, Wednesday morning, with both rising the most in more than four years to record highs. That narrowed the gap between the value of Capital One’s stock offering and Discover’s current trading level to around $14 from $18 earlier this week – a sign that the market is increasingly positive as to the agreement’s chances of success.

Representatives for Capital One, based in McLean, Virginia, and Discover, based in Riverwoods, Illinois, did not immediately respond to requests for comment.

Republicans have historically been more supportive than Democrats of deals of all kinds, including those involving banks, and Trump would have the power to appoint a number of banking regulators. Isaac Boltansky, director of policy research at trading and investment firm BTIG LLC, said one of the “most significant” implications of Trump’s return to the White House “could be the promotion of an environment much more favorable to consolidation.

“There are reservations, as the renewal of some key political positions could take time, but any change from the current leadership would likely lead to more merger and acquisition activity,” he said on Wednesday. in a note to customers. “We view this as a positive for transactions currently under consideration,” including Capital One’s planned purchase of Discover.

More broadly, larger bank mergers and acquisitions would become at least a possibility, according to Piper Sandler Cos. analysts Scott Siefers and Frank Williams.

“The group’s regulatory situation could certainly change significantly under greater Republican control,” they said in a research note Wednesday. “In the vast regional space, we can at least put mergers and acquisitions back in the debate”, which “has been largely non-existent in recent years in a punitive regulatory context”.

–With help from Eleanor Harmsworth.

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