The biggest deal

In the biggest deal of 2024 so far, Capital One agreed to buy Discover in a $35 billion all-stock deal to create the largest US credit-card company by loan volume. Now may come the hard part, however, as federal regulators scrutinize the deal for potential antitrust issues. Besides bringing together two storied consumer-finance brands, the combination would surpass rivals JPMorgan and Citigroup when it came to US credit-card loan volume. It would also give Capital One a foothold in the world of payment networks, allowing it to be less dependent on rivals Visa and Mastercard. Such a tie-up would arguably be even better for Discover, which posted a 62% drop in fourth-quarter profit amid the fallout from risk-management lapses that led to the resignation of its CEO. More broadly, the US is leading a revival in global mergers that many dealmakers didn’t think would emerge until later this year. Truist Financial is selling its insurance brokerage business in a deal valuing the asset at $15.5 billion and Walmart has agreed to acquire smart-TV maker Vizio for about $2.3 billion. These take the value of deals announced globally this year to roughly $425 billion—up 55% compared with this time last year. That’s good news for dealmakers working hard to put two consecutive years of falling values behind them. Chris Hughes writes in Bloomberg Opinion that the proposed Discover takeover by Capital One signals that after a miserable few years for M&A, companies are willing to take big swings again. —Margaret Sutherlin

The US blocked a United Nations Security Council resolution backing a cease-fire in Gaza Tuesday, just as Israel prepares for an assault on the southern-Gaza city of Rafah, where over a million Palestinians have sought refuge. The US used its veto power on the vote while the UK abstained. Algeria, the only Arab nation currently on the security council, brought the resolution forward. The US has pushed its own plan for a temporary cease-fire and the release of all hostages held by the militant group Hamas, while also warning against an Israeli assault on Rafah unless arrangements are made for civilians there to be moved to relative safety.

The US plans to unveil a “major sanctions package” against Russia following the death of opposition leader Alexey Navalny, the White House said. Navalny, Russia’s most outspoken anti-corruption advocate and critic of Vladimir Putin, died in prison on Feb. 16, according to the Russian government, and his body is being held, fueling speculation around how he died. The US has said Putin is responsible for Navalny’s death, while his wife Yulia has pledged to take up his cause.

Lawyers for WikiLeaks founder Julian Assange will make one last attempt to block his extradition to the US, where he faces spying charges that could land him in prison for decades if convicted. Assange’s lawyers argue that sending him to America would breach his human rights while supporters say it would be an attack on free speech. Assange has fought extradition for a decade and currently is in a high-security British prison, where his legal team and wife have said his health has deteriorated.

One of the most prolific hacker groups of all time was effectively shutdown by the US government, UK National Crime Agency and authorities from 11 different countries, according to the FBI. Officials said they seized 11,000 domains used by LockBit and its affiliates to facilitate ransomware. The operation, which disrupted the group’s infrastructure and targeted its malware deployment system, is said to have taken place in recent days. The Russian-based hacking group specializes in ransomware attacks to encrypt files on its victims’ computers, then demand payment to unlock the files. The group was responsible for last year’s attack on the US arm of Industrial & Commercial Bank of China, which disrupted the $26 billion US Treasury market.

Big tech dragged the stock market away from its all-time highs on Tuesday, with Wall Street awaiting Nvidia’s earnings tomorrow for confirmation the chipmaker can meet lofty expectations set by the artificial-intelligence boom. While the ongoing earnings season has so far reaffirmed the view that Corporate America is holding up well, the reporting period has been mixed for the “Magnificent Seven” megacaps. Here’s your markets wrap.

Some 2,000 gene therapies are in development—many aimed at cancer and rare diseases—and the buzz has never been louder. In January, Eli Lilly’s Akouos unit said its gene therapy helped an 11-year-old boy hear for the first time. That was only a month after two gene therapies for sickle cell disease were approved by the US Food and Drug Administration. But drug pioneers are discovering that scientific achievement doesn’t guarantee financial success—and that could hurt development in the long run.

WeightWatchers created an Ozempic “hype house” for social influencers. The day-long experience was a marketing event for WW’s new prescription obesity drug service—possibly the biggest brand shift in the company’s 60-year history. WeightWatchers has been enlisting influencers to “help bust the misconceptions and stigma around GLP-1 medications.” So how did the project work out? Not so good.

Oaxaca, one of Mexico’s poorest states, is by far the largest producer of mezcal. For decades most of its young people left, seeking work in the US. Now many are staying for jobs and some are starting their own companies amid the mezcal boom. There’s also no crop better suited to the area or the climate change era. In water-stressed regions, including much of Mexico and the Southwest US, it can be a godsend. But yet even some mezcaleros with much to gain are beginning to ask: How big is too big?

Get the Bloomberg Evening Briefing: If you were forwarded this newsletter, sign up here to receive Bloomberg’s flagship briefing in your mailbox daily—along with our Weekend Reading edition on Saturdays.

The Future Investor Series: Join us in Chicago Feb. 27 for The Future Investor: Navigating a Complex, Data-Driven World. The Future Investor series examines how data is playing a pivotal role across the financial landscape. We'll explore and chart a course for a future where data not only plays a key role in investment decisions but serves as a driving force behind investable enterprises. Register here.