Empresa Metropolitana de Águas e Energia S.A

What it is

EMAE owns and operates the hydraulic and power-generation backbone of greater São Paulo — dams, reservoirs, canals, pumping stations, and five generating plants along the Tietê river system and the Billings and Guarapiranga reservoirs. Total installed generating capacity is 935 MW.

Established in 1899, it operates several hydroelectric plants and is committed to renewable energy initiatives, including a floating solar power plant. The company traces its lineage to the São Paulo Railway, Light and Power Company, a Canadian-chartered firm authorised by presidential decree shortly after its 1899 founding.

Who owns it

On 5 October 2025, SABESP — São Paulo state’s water utility — acquired 74.9% of EMAE’s common shares and 66.8% of its preferred shares, taking control of 70.1% of total share capital. The aggregate acquisition cost was R$1.13 bn (US$219 mn).

The controlling stake now stands at 79.31% after further market purchases; Eletrobras, which previously held a 39% stake, sold its position and is no longer a shareholder. Insiders (including SABESP’s vehicle) hold 74.7% of shares per EODHD, with a slim 2.4% institutional free float.

Who runs it

Rafael Costa Strauch took over as CEO of EMAE in February 2026, installed after SABESP assumed management control following an Extraordinary General Meeting that restructured the board.

The CFO position was filled by Pedro Borges Petersen, and Fernando Luis Fernandes and Valéria Silva Campos remained as Operations Director and Legal Director, respectively.

The money, in plain words

EMAE lost R$133m (~US$26m) in its 2025 fiscal year, compared with a R$55m (US$11 mn) profit in 2024 and a R$150m (US$29 mn) profit in 2023 — three very different outcomes in three years (our calculation from EODHD data). Revenue fell 23.3% from 2024 to 2025 (R$621m (US$121 mn) to R$477m (US$93 mn), our calculation), reversing what had been a broadly flat 2023–2024 picture.

The loss means no meaningful return on equity — the business currently earns minus 13.8 cents for every real of owners’ equity, a return on equity of –13.8% — and no dividend. The balance sheet is unusually clean for a utility: net cash (cash minus all debt) is roughly R$374m (~US$73m, our calculation), which is more than a quarter of the company’s entire market value; that cushion limits downside risk even as earnings disappoint.

What it is doing now

In April 2026, SABESP proposed a full public tender offer (OPA) at R$61.83 (US$12)per EMAE share — a price equal to 100% of what SABESP paid when it acquired control in October 2025 for R$1.1 bn (US$214 mn). The announcement sent EMAE4 shares up sharply in a single session.

A separate offer will follow for preferred shareholders, who would receive SABESP shares in an exchange ratio yet to be fixed. If completed, EMAE would be absorbed into SABESP and delisted from B3.

What to watch

• OPA outcome. Brazil’s securities regulator CVM must approve the tender offer structure; the exchange ratio for preferred shares is the key economic variable for minority holders.
• Earnings recovery. Two profitable years gave way to a sharp 2025 loss; investors and SABESP need to see whether the operating loss is structural or a one-off transition cost.
• Water-energy synergy. The integration of the Guarapiranga and Billings systems is intended to give SABESP greater flexibility in water-resource management across the São Paulo Metropolitan Region. Whether that strategic rationale justifies the R$1.1 bn (US$214 mn) price is the central question for SABESP shareholders.
• Net cash deployment. R$374m (~US$73m) in net cash sits idle; how the new management allocates it — expansion, returns, or debt reduction at parent level — matters to any remaining minority.

This is news, not investment advice.