SAO PAULO, 14 June (Reuters) – A landmark agreement has been reached between Brazil’s Diagnosticos da America (Dasa) and health insurance provider Amil which will lead to the merger of their hospital enterprises; creating a joint venture with a forecasted net revenue of almost 10 billion reais ($1.86 billion), the companies reported on Friday.
The agreed arrangement progresses to establish an equally owned joint venture applying to hospital chain Impar, a Dasa-owned enterprise, which will absorb hospitals from the Amil-owned corporation Rede Americas.
The market reacted favorably with Dasa shares surging by as much as 12.5% after the announcement, despite ultimately paring back to trade down at roughly 3%.
The deal will see Impar in possession of 25 hospitals as well as several oncology clinics. This amounts to approximately 4,400 hospital beds in total. Revenue for the new amalgamated entity was projected at 9.9 billion reais by year-end 2023.
Dasa also disclosed that the transaction involves the transference of its 3.85 billion reais debt to Impar.
Investment bank Itau BBA analysts responded positively in a note to their clients, stating that the transaction is seen as positive for Dasa’s financial status. The analysts further explained, with the deal underway, Amil is forecasted to secure “increased bargaining power with third-party health plans”. This would particularly extend its influence in the metropolitan regions of Sao Paulo and Rio de Janeiro, potentially improving its fiscal margins and future profitability.
Dasa was established more than six decades ago. The healthcare conglomerate, operating hospitals, oncology clinics, and diagnostic centers, is a prominent part of Latin America’s largest economy. The entity has stated that it could potentially list its Impar shares separately in future.
Dasa and Amil share a historical association, with the billionaire Bueno family in the central position of this lineage. The family has held control of Dasa since 2013, although they launched Amil back in the 1970s. However, their stake in the company was sold to UnitedHealth Group in the 2010s. The latter subsequently sold Amil in the latter part of last year to Jose Seripieri Filho, a Brazilian entrepreneur.
Impar’s new CEO will be Licio Tavares Cintra, who also holds the role of chief executive at Dasa. The board will be chaired by Dulce Pugliese de Godoy Bueno.
This agreement, which does not include certain hospitals owned by the companies in Brazil’s northeastern region, still awaits approval from Brazil’s antitrust regulator CADE.
(Reporting by Andre Romani; Additional reporting by Luana Maria Benedito; Editing by Gabriel Araujo, Toby Chopra and Leslie Adler – Exchange rate: $1 = 5.3635 reais)
