Brazil's Dasa, Amil to merge hospital businesses

SAO PAULO (Reuters) -Brazil's Diagnosticos da America (Dasa) and health insurance operator Amil have agreed to combine their hospital businesses, setting up a joint venture with almost 10 billion reais ($1.86 billion) in net revenue, the firms said on Friday.

Under the agreement, Dasa and Amil will each own half of hospital chain Impar, a Dasa company that will incorporate hospitals from Amil-owned Rede Americas.

Shares in Dasa jumped as much as 12.5% after the announcement, before reversing course to trade down about 3%.

After the deal, Impar is set to own 25 hospitals as well as some oncology clinics, totaling around 4,400 hospital beds. The combined firm's total revenue was estimated at 9.9 billion reais in 2023.

The transaction also includes the transfer of 3.85 billion reais of Dasa's debt to Impar, Dasa said in a securities filing.

"The transaction is seen as a positive development for Dasa's balance sheet," said analysts at investment bank Itau BBA in a note to clients.

They added that under the deal Amil is expected to have "increased bargaining power with third-party health plans," particularly in the Sao Paulo and Rio de Janeiro metropolitan areas, as it gets more room to improve its margins and potentially enhance profitability in the future.

Dasa, a healthcare giant founded over 60 years ago that owns hospitals, oncology clinics and diagnostic centers in Latin America's largest economy, said that in the future it could split off and list its Impar stake.

Dasa and Amil have a common background involving the billionaire Bueno family, which has been the controlling shareholder of Dasa since 2013 but founded Amil in the 1970s, before selling it in 2010s to UnitedHealth Group.

The U.S. giant sold Amil late last year to Brazilian businessman Jose Seripieri Filho.

Dasa's chief executive, Licio Tavares Cintra, will also serve as Impar's CEO, while Dulce Pugliese de Godoy Bueno was named chair of the board.

The deal, which did not include a handful of hospitals owned by the companies in Brazil's northeast region, still requires approval from Brazil's antitrust watchdog CADE.

($1 = 5.3635 reais)

(Reporting by Andre Romani; Additional reporting by Luana Maria Benedito; Editing by Gabriel Araujo, Toby Chopra and Leslie Adler)