Equatorial Buys Strategic Stake in Brazil's Copasa Amid Privatization

Brazil's Equatorial has secured a strategic 30% stake in Copasa, a large water and sewage firm, for $1.1 billion. This move follows a withdrawal by a consortium led by Aegea. The state plans a secondary offering to sell more shares, potentially increasing Equatorial's stake to 42.6%.

Equatorial, a Brazilian power company, has emerged as the strategic investor in the privatization drive of Copasa, securing a 30% stake for 5.59 billion reais ($1.1 billion). This development was announced by both firms on Wednesday.

The government of Minas Gerais initiated a share sale exceeding $1 billion in May, aiming to relinquish its control over Copasa, a utility firm delivering sanitation amenities to 12 million people. Equatorial's bid of 49.03 reais per share surpassed the minimum price set by the government by 3.8%, ensuring its role as the strategic investor after a consortium, comprising Aegea and partners, withdrew from the process.

The state retains just over 50% of Copasa's equity and plans a second phase offering on June 11, potentially increasing Equatorial's share to 42.6%. Following its major stake acquisition in Sao Paulo's Sabesp in 2024, Equatorial's involvement in Copasa reflects its growing influence in Brazil’s sanitation sector.