Cade approves the purchase of SulAmérica by Rede D’Or without restrictions

Cade (Administrative Council for Economic Defense) approved by a majority this Wednesday (14) the purchase of health plan operator SulAmérica by the hospital group Rede D’Or, without restrictions.

Rede D’Or announced the acquisition of SulAmérica at the end of February, in an all-stock transaction that valued the health plan company at the time at approximately R$13 billion. The deal also marked Rede D’Or’s biggest acquisition since the company debuted on B3, in December 2020, with an initial stock offering (IPO) of R$ 11.5 billion.

Cade’s superintendence had already recommended in November to endorse the unrestricted transaction. Susep (Superintendence of Private Insurance) also approved the acquisition in August. The business still needs the green light from the ANS (National Supplementary Health Agency).

Six Cade directors, including the case’s rapporteur, Luiz Hoffmann, and the president, Alexandre Macedo, voted for the unrestricted approval. Board member Lenisa Prado voted for approval, as long as the benefits management company Qualicorp was excluded from the resulting group.

Rede D’Or shares closed the day up 4.91%, and SulAmérica’s up 5.06%.

Before the judgment, traditional hospital groups, such as Einstein, Sírio Libanês and Mater Dei, expressed their opposition to the deal, questioning the need for Cade to judge the process at this time, with still more than one hundred days to go before the end of the legal period, which expires in February .

The representative of Sírio Libanês cited an “unusual speed” at Cade and errors in the methodology that guided the recommendations of the general superintendence.

However, Hoffmann stated that “there is no economic justification for SulAmérica to disqualify competitors” from Rede D’Or since the operator’s revenue is insufficient to maintain the group by itself and therefore the hospital network needs to meet other plans.

Directors Victor Fernandes and Gustavo de Lima cited the risks of exchanging sensitive information from rivals of Rede D’Or that may eventually be obtained by SulAmérica within the scope of its regular business, such as those involving physicians. But they considered that it is up to the ANS to regulate the sector.

The endorsement comes almost a year after the municipality approved the purchase of Notre Dame Intermédica by Hapvida, which created the largest vertical health company in the country.