Bradesco joins OdontoPrev and creates US$ 755.8 million company
Folha de S. Paulo
Bradesco Seguros, the largest Brazilian insurance company, announced yesterday an association with OdontoPrev, a company leader in dental health plans, a business that grows at a rate of 20% a year and that advances towards classes C and D. The business places Bradesco in the shared control of OdontoPrev, which becomes a company of nearly R$ 1.3 billion (US$ 755.8 million) in market capitalization with a portfolio of 3.9 million customers. There are no changes for the customers and current management will be maintained. Bradesco shall appoint three members for the Council. The shares of OdontoPrev had a 30.65% increase in value yesterday.
In accordance with the agreement, Bradesco transfers its own dental company, Bradesco Dental, to OdontoPrev. The model is similar to the association performed between Itaú and Porto Seguro, in which the Bank has transferred it its car insurance portfolio.
According to the President of Bradesco, Luiz Carlos Trabuco Cappi, the insurance and private pension businesses are strategic for the Bank, that's why the Bank insists on being in command. "Bradesco is a double-face coin: on the side, banking services, and, on the other, insurance. We are not obsessed for the control. We have to live the business, otherwise we would become mere investors. In that case, it would be better to be only a shareholder of the company", he said.
After closing the deal, Bradesco Saúde will have 43.5% of OdontoPrev, and the former founders, a group of dentists, 7.56% - before the association they had 13%. The shares in the hand of the market fall from 82% to 48,94%. Bradesco Dental gets into the association with R$ 248 million (US$ 144.2 million) in cash, and OdontoPrev, with another $ 334 million ($ 194.2 million). From that total, R$ 327 million ($ 190 million) will be distributed to the shareholders - R$ 13.07 ($ 7.6) per share.