Rede D’Or buys SulAmérica insurance company

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Rede D’Or buys SulAmérica insurance company

The hospital network Rede D’Or and the insurance company SulAmérica announced this Wednesday (23) the business combination between the two companies, with the unification of their shareholder bases, through the incorporation of SASA, the listed holding of Grupo SulAmérica, by D’Or Network.

According to the terms established in the agreement, anticipated by columnist Lauro Jardim, from the newspaper O Globo, SulAmérica was valued at around R$ 15 billion by Rede D’Or. The transaction is subject to approval by the shareholders’ meetings of both companies and by regulatory authorities.

Under the agreement, closed in just over a week, the companies will continue with independent operations in their respective sectors.

The good relationship between the Moll families, which owns Rede D’Or, and Larragoiti, from SulAmérica, contributed to the operation being completed in a short period of time, according to sources.

“The operation encompasses two leaders in the healthcare market in Brazil, joining the largest hospital network to one of the main independent insurers in the country,” the companies said in a statement.

Once the transaction is authorized, SulAmérica’s shareholders will become shareholders of Rede D’Or and Patrick Larragoiti, current chairman of the Board of Directors of SulAmérica, will become a member of the Board of Directors of Rede D’Or.

SulAmérica’s shares hit a strong high at the end of this Wednesday’s trading session on B3, and closed with an appreciation of 25.1%, quoted at R$ 30.94. Rede D’Or shares rose 8.82%, to R$55.50.

The SulAmérica group is the fifth largest health plan in the country, according to data from Lafis Consultoria. In December, the insurance company had announced the purchase of Sompo Saúde, for R$ 230 million.

“SulAmérica will keep its commitments to its more than 7 million customers, 30 thousand brokers and commercial partners, and more than 23 thousand contracted service providers. Rede D’Or, in turn, will continue to offer the best long-term commercial relationships more than 300 partner operators and their patients the best that contemporary medicine can offer,” the companies said in the statement.

The companies further say that the combination “builds on strategic foundations for expanding and aligning their healthcare ecosystems, including the healthcare, dental, life, pension and investment businesses, on behalf of all customers, beneficiaries and business partners.” “.

Pursuant to the agreement, the business combination will be carried out through the merger of SASA into Rede D’Or, resulting in the extinction of SASA, which will be succeeded by Rede D’Or in all its assets, rights and obligations.

“In addition to insurance operations, the relevant role of SulAmérica Investimentos, one of the main independent asset managers and administrators in the country, which will keep its management team, its operation and successful strategy unchanged,” reads the statement.

SASA’s shareholders will receive new common shares issued by Rede D’Or in replacement of the common or preferred shares they hold on the date of consummation of the merger — these shares will be extinguished.

Also according to the companies, once the operation is implemented, the shareholders of SASA will migrate to the shareholding base of Rede D’Or, which will remain a publicly-held company listed on the Novo Mercado.

The replacement ratio of the merger was determined based on the market prices of the shares issued by Rede D’Or and the units referenced in the shares issued by SASA, considering the closing prices on February 18, 2022 as a reference, plus a 49.3% premium on SASA units.

In this way, SASA’s shareholders will receive a number of new common shares of Rede D’Or equivalent to 13.5% of its capital stock after the completion of the transaction (excluding treasury shares).

Under the terms of the agreements, SASA assumed an obligation of exclusivity with Rede D’Or, valid for 12 months from this Wednesday, being subject to the payment of a fine in the amount of R$ 5 billion to Rede D’Or, in case of non-compliance .

SASA’s controlling shareholders, in turn, also assumed an exclusivity obligation with Rede D’Or, for a period of 18 months, which includes the obligation to vote against any competing transaction eventually submitted to SASA’s general meeting.

Failure to comply with this obligation subjects SASA’s controlling shareholders to the payment of a non-compensatory fine of R$2 billion to Rede D’Or.

SulAmérica also reported on Wednesday its results for the fourth quarter of 2021, when it had a loss of R$31.2 million, reversing the profit of R$42.7 million in the same period of the previous year.

According to the company, the result mainly reflected the higher loss ratio in the health segment in the context of the pandemic.

In the consolidated for 2021, the insurance company had a profit of R$ 332.5 million, a decrease of 85.8% compared to the previous year.

Rede D’Or publishes its results at the end of March.

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