Brazil's Sul America Shares Rise 13% After Takeover by Rede D'Or Agreed

By Jeffrey T. Lewis

SAO PAULO--Sul America SA shares jumped 13% to 34.88 reais, the equivalent of $6.85, after the insurer agreed to be taken over by healthcare provider Rede D'Or Sao Luiz SA.

Rede D'Or's shares fell 5.8% to 52.28 reais. Even with Thursday's jump for Sul America, the insurer's share price remained well below the record-high close of 61.81 reais in January 2020.

Rede D'Or and Sul America said Wednesday after the close of trading that they had agreed that Rede D'Or will acquire the insurer in an all-share deal that will give Sul America shareholders a 49% premium over the closing price for the insurer on Feb. 18.

The combination of the insurer and the healthcare provider should benefit both companies, said Ativa Investimentos analyst Leo Monteiro, with Sul America's health policies becoming more attractive with the inclusion of Rede D'Or's hospitals in their network and Rede D'Or gaining access to Sul America's more than 2.3 million health insurance clients.

Write to Jeffrey T. Lewis at [e-mail]

(END) Dow Jones Newswires

02-24-22 0908ET