Presidents’ Day marked a notable merger in the finance sector as Warren Buffett-backed Capital One (COF) agreed to acquire Discover Financial Services (DFS) in a stock-based mega-merger of $35.3 Bn, creating a new financial Goliath that will compete with the likes of Visa (V) and Mastercard (MA). Besides payment networks, the two companies will also form the largest U.S. credit card issuer by loan volume, as well as the sixth-largest U.S. bank by assets.

In typical M&A fashion, shares of Discover are up 13.6% to $125.53 in premarket trade, while Capital One is down 4.3% to $131.31. Many are drawn to the deal in hopes of lucrative interest charges as credit card and delinquency rates continue to climb post-pandemic.

Capital One anticipates the mega deal to generate $2.7 Bn in pretax synergies and add more than 15% to its adjusted EPS in 2027. It’s also expected to deliver a return on invested capital of 16% in 2027 with an internal rate of return of more than 20%.

Investor exuberance aside, the proposed merger could face an uphill regulatory battle in Washington, where the Biden administration has long pledged an aggressive crackdown against consolidation in the financial sector.

Before the two companies can close the $35.3 Bn deal, they must first obtain approval from federal antitrust watchdogs, who have challenged — and sometimes even blocked — a slew of recent deals involving airlines, biotech firms, grocery chains and tech giants.

For example, last year the FTC sued to block the merger of drugmakers Amgen and Horizon Therapeutics, saying the tangled web of drug industry dealmaking would enable Amgen to leverage the monopoly power of two top Horizon drugs that have no rivals.

Jonathan Kanter, Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice stated last Summer, that the government would not shirk from overseeing “the largest and most powerful actors.”