Yduqs, the company behind the Estácio college network and one of Brazil's largest higher education groups, confirmed on Monday (24) that it is in talks with Afya about a possible combination of the two education companies. The confirmation came in a fato relevante, the material fact disclosure that Brazilian listed companies must file, a day after the newspaper Valor Econômico reported that executives of German group Bertelsmann, Afya's controlling shareholder, met with Yduqs representatives in São Paulo to start the discussions, with a new meeting already scheduled for September.

In the filing, Yduqs says the talks "are at an early stage" and that there is so far "no agreement, contract or binding commitment" between the companies, their shareholders or their managers. According to Valor, the statement adds that "there is no guarantee that the talks will result in the signing of definitive documents or in the consummation of any transaction".

The company says that, in the normal course of business, it continuously evaluates strategic opportunities and has always seen "structural merits" in consolidating the education sector as an important lever to generate value for shareholders.

The news was well received by the market. Yduqs shares (YDUQ3) led gains on the Ibovespa, the main index of the São Paulo stock exchange, jumping about 13% to R$ 8.90, according to Folha. Afya's shares trade on New York's Nasdaq under the ticker AFYA.

Yduqs, formerly known as Estácio, owns the Estácio, Wyden and IBMEC brands and ranks among Brazil's leading higher education companies. Afya, in turn, focuses on health education and has expanded through acquisitions, taking over schools and widening its presence in the medical school market across different regions of the country. A combination would join one of Brazil's largest higher education groups with a company specialized in medical courses.