Sept. 1 (Bloomberg) -- Gafisa SA, Brazil's second-largest real estate developer, agreed to buy a controlling stake in rival Construtora Tenda SA, aiming to boost its presence in the low- income housing market. The companies' shares surged.

Tenda jumped 23 percent to 4.60 reais in Sao Paulo trading, the biggest gain since it started trading in October last year. Gafisa gained the most on the Bovespa index, rising 8.8 percent to 25.40 reais.

As part of the transaction, Gafisa will have a 60 percent stake in Tenda, while Fit Residencial Empreendimentos Imobiliarios Ltda., the Gafisa subsidiary focused on low-income housing, will be part of Tenda, Sao Paulo-based Gafisa said in a statement on the Brazilian securities regulator's Web site.

``This transaction can be good for both companies,'' said Leonardo Cavarge, analyst with Link Corretora. ``Tenda has always been dedicated to low income so it will have synergies with Fit. There will be an exchange in knowledge that will be positive for the companies.''

At the date of the transaction, Fit will have capital stock of 420 million reais ($256 million) and a net cash of 300 million reais, Gafisa said.

The transaction will be submitted for approval by shareholders, Gafisa said.

To contact the reporter on this story: Telma Marotto in Sao Paulo at Tmarotto1@bloomberg.net

Last Updated: September 1, 2008 16:44 EDT