Overview

• Sabesp shares jumped as Sao Paulo announced a two-stage privatization plan, starting with the selection of two strategic shareholders.
• The innovative sale model is designed to increase company value and attract investors focused on governance and efficiency.
• Strategic investors will anchor a broader market offering, with the highest bidders gaining significant shareholding.
• Sao Paulo aims to reduce its stake in Sabesp from 50.3% to as low as 18%, potentially divesting about $3.4 billion worth of shares.
• The privatization process, expected to conclude by mid-year, will include a lock-up period until 2029 and a golden share for the state to ensure service goals are met.