By Brazil Stock Guide – The shareholders of Aegea — Equipav, Itaúsa and Singapore sovereign wealth fund GIC — have formally entered the race for the privatization of Companhia de Saneamento de Minas Gerais – Copasa MG (CSMG3), in a transaction that could define the new center of power at one of Brazil’s last major state-controlled sanitation companies still available to private capital.
The proposal was submitted through Livorno Participações, a corporate vehicle created to take part in Copasa’s process to select a reference investor. The structure is central to understanding the deal: Livorno is not a sanitation operator, nor a company known to the broader market. It is an investment vehicle used by Aegea’s shareholders to compete for a 30% stake in the Minas Gerais utility.
Protected balance sheet
The structure also protects Aegea itself. The sanitation company will hold less than 1% of Livorno’s capital and said it will not assume any financial obligation in the transaction. The remaining capital will be subscribed by its shareholders, according to material facts released by Aegea and Itaúsa.
That separation is not a technical footnote. Aegea already carries a heavy capital structure after years of aggressive expansion through concessions, public-private partnerships and acquisitions. In 2025, the pro forma net debt of the Aegea ecosystem stood at R$47.0 billion, with leverage of 4.51 times EBITDA. On a corporate basis, net debt was R$30.2 billion, with leverage of 3.78 times EBITDA.
In practice, the transaction separates three roles. Livorno is the legal instrument used to submit the proposal. Equipav, Itaúsa and GIC are the shareholders providing the capital. Aegea enters only with a residual stake, preserving liquidity and avoiding the addition of another multibillion-real acquisition directly onto its balance sheet.
Reference, not takeover
Copasa’s process is not a full sale of the company. The plan is to select a reference investor, which may acquire shares equivalent to 30% of the Minas Gerais utility’s total capital. The state of Minas Gerais intends to reduce its stake, while keeping a residual position and a golden share, a mechanism that preserves specific political rights.
That design turns the privatization into a sale of influence and governance, rather than a straightforward takeover. The winning investor would not buy 100% of Copasa, but would become its main private shareholder and the anchor of the company’s new command structure.
For the buyer, Copasa offers scale in sanitation, long-term contracts and exposure to a regulated sector with large investment needs. For Minas Gerais, the sale is a way to attract private capital, accelerate operational efficiency and unlock water and sewage investments without completely giving up instruments of influence over the company.
Sabesp out
Sabesp’s exit changed the field. The São Paulo sanitation company is no longer in the race for Copasa, removing a heavyweight potential bidder and opening space for other infrastructure and sanitation groups.
Equatorial may still enter the process, either alone or in a new corporate arrangement. Its final participation, however, will depend on the configuration of bids and the next steps in the process led by Minas Gerais.
With Sabesp out, the bid by Aegea’s shareholders gains relevance. The group combines long-term capital, indirect sector experience and a corporate structure designed to protect balance sheets. In this race, financial engineering matters almost as much as operational capacity.
Short timetable
The calendar also puts pressure on potential bidders. The reference-investor finalists are expected to be announced on May 27. The selected investor, if any, is scheduled to be disclosed on June 1.
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