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Brazil's YDUQS in talks with Afya over potential business combination (updated)

UPDATE 1-Brazil's YDUQS in talks with Afya over potential business combination

Adds details, share reaction, analyst comment in bullets throughout

- Brazilian education company YDUQS YDUQ3.SA said on Monday it is in talks with Nasdaq-listed Afya AFYA.O over a potential business combination, sending YDUQS's shares sharply higher.

Discussions are at an early stage and no agreement, contract or binding commitment has been reached, YDUQS said in a securities filing.

  • Afya, controlled by German group Bertelsmann BTGGg.F, confirmed the talks in a separate filing.

  • YDUQS's shares rose more than 12%, on track for their best daily performance since mid-2023 and the biggest gainers on Brazil's Bovespa stock index .BVSP, which was up 1%.

  • Afya shares fell around 1%.

  • YDUQS owns brands such as Ibmec, Damasio Educacional and medical education unit Idomed.

  • Afya is one of Brazil's largest groups specializing in medical education, one of the most profitable degree programs in the education sector.

  • Itau BBA analysts said they see a rationale for a combination, noting the companies' medical education footprints appear geographically complementary.

  • "That said, given the differences between the companies' broader business models and the very early stage of the discussions, we still have limited visibility on the magnitude of potential synergies or the ultimate strategic and financial structure of a transaction," they added.


(Reporting by Gabriel Araujo, Isabel Teles and Alberto Alerigi Jr. Editing by Mark Potter)

((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))

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