Capital One-Discover Deal Waved Ahead by Antitrust Officials

The proposed $35 billion merger between Capital One Financial Corp. and Discover Financial Services cleared a major regulatory hurdle as the US Justice Department told financial regulators in a confidential memo that it didn’t have sufficient evidence to block the transaction.

The DOJ memo to the Federal Reserve and Office of the Comptroller of the Currency — the two banking regulators that must sign off on the deal — would allow them to approve the transaction, according to people familiar with the decision who asked not to be named discussing a non-public matter.