Sabesp acquires control of EMAE for R$ 1,13 billion.

247 - The São Paulo State Basic Sanitation Company (Sabesp) announced this Sunday the acquisition of control of the Metropolitan Water and Energy Company (EMAE) for R$ 1,13 billion, equivalent to approximately US$ 208 million. The operation, originally reported by Brazil Stock GuideThis marks a strategic step in consolidating the state's water security plan and expanding the company in the energy sector.

The deal was structured in two stages. In the first, Sabesp acquired 74,9% of the common shares of EMAE that belonged to Phoenix Água e Energia SA, a company linked to businessman Nelson Tanure, through the Phoenix FIP fund, managed by Trustee. These shares were pledged as collateral for a debenture issue of R$ 520 million, whose interest payment due on September 27th was not made. After the default, the fiduciary agent Vórtx and the administrator XP executed the guarantees, transferring the controlling stake in EMAE.

In the second phase, Sabesp signed an agreement with Eletrobras (B3: ELET3; NYSE: EBR) to purchase 66,8% of EMAE's preferred shares at a price of R$ 32,07 per share, totaling R$ 476,5 million. The ordinary shares held by Phoenix were acquired for R$ 59,33 each.

With the completion of the operation, still subject to approval by the National Electric Energy Agency (ANEEL) and the Administrative Council for Economic Defense (CADE), Sabesp will hold 70,1% of EMAE's total capital, consolidating control of one of São Paulo's most strategic assets.

Expansion and operational synergies

According to Sabesp's CFO and Investor Relations Director, Daniel Szlak, the acquisition represents progress in the integration between the sanitation and energy sectors.

 “By combining water security with energy potential, this acquisition expands operational synergies and strengthens the company’s ability to meet climate challenges and the increased demand for essential services,” Szlak said in a statement.

The move is also seen as a key piece in the company's post-privatization strategy. Direct control of the Billings and Guarapiranga reservoirs will allow Sabesp greater operational flexibility and reduced long-term supply costs, especially in a scenario of critical levels in the water sources — the lowest since the 2015 water crisis.

Beyond water management, the integration with EMAE expands Sabesp's operations in the energy sector, guaranteeing stable cash flow and revenue diversification through long-term contracts indexed to inflation. This operation positions the São Paulo state-owned company as a hybrid operator of water and renewable energy infrastructure, in line with the state's sustainability and climate resilience goals.