Yduqs, the Brazilian higher education group that owns Estacio and Ibmec, and Afya, which controls one of Brazil's largest networks of medical schools, signed an agreement on Wednesday (Sept. 23) to combine their businesses. According to the regulatory filing released by the companies, the combined group will gather about 38,000 undergraduate medical students and nearly 5,900 authorized annual seats in the course. Together, the two companies booked net revenue of R$ 9.4 billion in the 12 months through June 2026, Folha de S.Paulo reported, with medicine accounting for roughly 45% of the total.
Formally, Yduqs absorbs Afya, a company incorporated in the Cayman Islands and listed on the Nasdaq, which will cease to exist. Economic control moves the other way: under the share exchange ratio, Afya's shareholders will hold 69% of the combined company and Yduqs's shareholders, 31%. Yduqs remains listed on the Novo Mercado segment of the B3, Brazil's stock exchange, and takes over all of Afya's assets, rights, obligations and liabilities. Afya's main shareholder is the German group Bertelsmann, with about 65% of its shares. At Yduqs, the largest owners are the private equity fund Advent, with about 15%, and the Zaher family, with roughly 12%, according to Exame.
The antitrust test
In 2025, Afya had revenue of R$ 3.7 billion and Yduqs of R$ 5.5 billion, according to Exame. The combined company would hold about 17% of the medical school market, according to J.P. Morgan, and the two firms together account for close to 18% of the medicine seats authorized in Brazil. Closing the deal requires approval from Cade, Brazil's antitrust regulator, from shareholder meetings at both companies and from creditors, with a deadline of March 31, 2028. Concentration may run higher city by city, and no asset sales have been agreed so far. Yduqs knows the risk: in 2017, when it was still called Estacio, Cade blocked its sale to Kroton, now Cogna, over concentration in local markets.
How the money flows
The contract includes an economic equalization mechanism in Afya's favor and allows Yduqs to pay its shareholders, since June 30, the higher of R$ 750 million or the free cash flow it generates in the period. If it pays out more than it generates, Afya is entitled to compensation. There is also a cap: for the deal to close, Yduqs's net debt cannot rise by more than R$ 750 million above the June level. If either company walks away, the break fee is R$ 325 million before the shareholder meetings and R$ 650 million after. No fee applies if Cade blocks the deal, shareholders reject it or a material adverse change hits either company.
For Yduqs, the merger deepens its bet on premium assets, such as medicine and Ibmec, which produced 48% of its adjusted EBITDA in the first half of 2026, according to Folha. Afya brings continuing education for practicing physicians, with more than 56,000 students as of June, and clinical practice software, Whitebook and iClinic, with more than 200,000 paying users. The companies estimate synergies with a net present value of up to R$ 2.2 billion, mostly from cost cuts, with 80% achievable in the first three years after closing. The projections already discount integration costs and the effect of Pillar Two, the OECD rule that imposes a 15% minimum tax on large multinational groups.
"We will enable the greatest impact of artificial intelligence and other technologies on student education, and leverage the best practices of both teaching platforms, preserving the strengths, brands and institutional capabilities of each business," Afya CEO Virgilio Gibbon said in a statement. "Brazil still faces an enormous challenge: expanding access to higher education while improving health indicators and the distribution of doctors, urgent issues for the country."
For shareholders and managers, the deal promises scale and cost cuts. For students and families, the immediate effect is unclear: city-by-city concentration will be Cade's main test, and the spread of doctors across the country remains the challenge Afya itself named.