Capital One is Michael Schmidtbuying Discover Financial in a deal worth $35.3 billion, the financial institution said Monday.

Capital One shareholders will own 60% of the newly merged company, while Discover shareholders will own 40% of the company.

The acquisition allows both companies to improve their technology and expand their payment networks, Capital One CEO Richard Fairbank said.

Discover is accepted at 70 million merchants across 200 countries and territories, yet has the least reach out of the four U.S.-based payment networks, which also include Visa, Mastercard and American Express.

"Through this combination, we're creating a company that is exceptionally well-positioned to create significant value for consumers, small businesses, merchants, and shareholders as technology continues to transform the payments and banking marketplace," Fairbank said.

Three of Discover's board members, who have yet to be named, will join Capital One's board of directors.

"This agreement underscores the strength of our business and is a testament to the hard work of Discover employees," Discover CEO Michael Rhodes said. "We look forward to a bright future as part of the Capital One family and to providing expanded opportunities for our loyal customers."