Health Plan Giants Hapvida and NotreDame Merge to Create R$110.5bi Company

In late February, Brazil's largest health insurance companies - Hapvida and NotreDame Intermédica - announced a multi-billion real merger agreement, creating a leading company in the sector with over 8.4 million clients and 70 hospitals nationwide as well as a market value of over R$ 110.5 billion.

Hapvida will own 53.6% of the new company, whilst NotreDame will have the remaining 46.4% stake. It is the largest corporate merger in Brazil since the groundbreaking merger between Itaú and Unibanco, two of Brazil's largest financial institutions, in 2008.

The merger pairs Hapvida’s presence in Brazil's North and North-East regions with NotreDame’s robust South-East operations, whilst reducing 15% of operational costs. Irlau Machado, NotreDame's CEO and Jorge Pinheiro, the CEO of Hapvida, will serve as co-CEOs of the new company, with each responsible for the aforementioned geographic regions. 

Hapvida was assisted by renowned Brazilian law firms Pinheiro Neto Advogados and Madrona Advogados in the deal, whilst also relying on BTG Pactual and Itaú BBA as financial advisors. NotreDame, respectively, received legal support from well-known São Paulo-based law firm Souza, Mello e Torres, as well as financial support from Citigroup and JP Morgan. 

The merger now awaits the approval of the Brazilian authorities, such as the Administrative Council for Economic Defense (CADE) and the National Agency of Supplementary Health (ANS), as well as from both sets of shareholders in extraordinary general meetings scheduled for March 29.