10
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
A REVIEW OF CADE’S CASE
LAW IN THE WATER AND
SANITATION SECTOR: A LACK
OF CONSENSUS, THE SABESP’S
CASE, AND WHAT TO EXPECT
IN THE NEAR FUTURE
1
Revisão da jurisprudência do Cade sobre o setor de
saneamento básico: ausência de consenso, o caso
da Sabesp e o que esperar para o futuro próximo
Gesner Oliveira
2
Fundação Getulio Vargas (FGV-SP) e GO Associados Consultoria Empresarial (GO Associados) – São Paulo/SP, Brasil
Rafael Pereira Oliveira
3
GO Associados Consultoria Empresarial (GO Associados) – São Paulo/SP, Brasil
José Matheus Andrade
4
GO Associados Consultoria Empresarial (GO Associados) – São Paulo/SP, Brasil
Fernanda Romero G. Pereira
5
Fundação Getulio Vargas (FGV-SP) – São Paulo/SP, Brasil
STRUCTURED SUMMARY
Objective: With the recent approval of the New Sanitation Legal Framework (Law No. 14,026/2020), the
privatizations of Corsan in 2023 and Sabesp in 2024, and the prospect of several concession auctions
in the next three years, it is expected that the Administrative Council for Economic Defense (Cade) will
deepen its competitive analyses in the sector. This article examines Cade’s case law on the Water and
Sanitation sector since the enactment of Law No. 12,529/2011, focusing on three main aspects: (i)the
structural characteristics of the sector; (ii)the definition of the relevant market, in its product and
1 Editor responsável: Prof. Dr. Victor Oliveira Fernandes, Conselho Administrativo de Defesa Econômica (Cade), Brasília, DF, Brasil.
Lattes: http://lattes.cnpq.br/5250274768971874. ORCID: https://orcid.org/0000-0001-5431-4142.
Recebido em: 24/12/2024 Aceito em: 11/06/2025 Publicado em: 25/06/2025
2 Sócio Executivo na GO Associados. Professor da Fundação Getulio Vargas em São Paulo. PhD em Economia pela
Universidade da Califórnia/Berkeley. Mestre em Economia pela Unicamp. Bacharel em Economia pela Universidade de São
Paulo. Foi Presidente da Sabesp de 2007 a 2011 e Presidente do Cade de 1996 a 2000.
E-mail: gesner@goassociados.com.br Lattes: https://lattes.cnpq.br/5490236458552356 ORCID: https://orcid.org/0000-0002-4628-4331
3 Gerente de Projetos e Macrossetorial na GO Associados. Mestre em Economia pela Universidade de São Paulo.
Bacharel em Economia pela Fundação Getulio Vargas em São Paulo.
E-mail: rafael.oliveira@goassociados.com.br Lattes: https://lattes.cnpq.br/8898014256402252 ORCID: https://orcid.org/0009-0000-2732-7802
4 Coordenador de Defesa da Concorrência na GO Associados. Mestre em Economia pela Universidade de São Paulo.
Bacharel em Economia pela Universidade de Brasília.
E-mail: jose.matheus@goassociados.com.br Lattes: lattes.cnpq.br/8445860467104322 ORCID: orcid.org/0009-0001-8377-134X
5 Graduanda em Economia pela Fundação Getulio Vargas. Bacharel em Direito pela Fundação Getulio Vargas.
E-mail: fernanda.rgp@gmail.com Lattes: lattes.cnpq.br/8217256835032516 ORCID: orcid.org/0009-0005-9027-6848
1
11
geographic dimensions; and (ii)the criteria commonly used for concentration analyses. Finally, the
article also explores Sabesp’s privatization and the outlook not only for coming auctions, expected to
drive approximately BRL 115 billion in investments and benefit a total of 35.9 million people, but also
potential new privatizations.
Method: A descriptive review of Cade’s case law on the Water and Sanitation sector, based on cases
from the agency’s database.
Conclusions: Since 2012, Cade has reviewed 30 merger cases involving concession regimes in the
sector, with 12 occurring ater 2020, indicating a positive impact of the new regulatory framework.
Only 12 cases involved some sort of concentration analysis. Cade has established consensus that the
sector has natural monopoly characteristics, focusing on competition for the market rather than within
the market. Regarding relevant market definition, Cade sometimes treats water supply and sewage
treatment services as a single market and sometimes as distinct markets, though it consistently
defines the geographic dimension as national. For concentration analyses, one can notice there is
still no consensus since three methodologies have been applied: (i) population served; (ii) potentially
served economies; and (iii) equivalent population. Considering the wave of mergers, acquisitions,
and potential new market entrants on the horizon, this is a timely opportunity for Cade to adopt a
clearer approach in order to enhance its capacity to safeguard competition and, ultimately, foster the
expansion of W&S services as well as their recognized social benefits.
Keywords: water and sanitation; Cade; concentration analysis; privatization; Sabesp; auctions.
RESUMO ESTRUTURADO
Objetivo: com a recente aprovação do Novo Marco Legal do Saneamento (Lei nº 14.026/2020),
as privatizações da Corsan em 2023 e da Sabesp em 2024, e a perspectiva de diversos leilões de
concessões nos próximos três anos, espera-se que o Conselho Administrativo de Defesa Econômica
(Cade) aprofunde suas análises concorrenciais no setor. Este artigo examina a jurisprudência do Cade
sobre o setor de saneamento básico desde a promulgação da Lei nº 12.529/2011, com foco em três
aspectos principais: (i) características estruturais do setor; (ii) definição de mercado relevante, nas
dimensões produto e geográfica; e (iii) critérios comumente utilizados para análises de concentração.
Ao final, o artigo também explora a privatização da Sabesp e as perspectivas tanto para os próximos
leilões no setor, que devem movimentar cerca de R$ 115 bilhões em investimentos e beneficiar um
total de 35,9 milhões de pessoas, quanto para possíveis novas privatizações.
Método: revisão descritiva da jurisprudência do Cade sobre o setor de saneamento básico, baseada
em processos na base de dados do órgão.
Conclusões: desde 2012, o Cade analisou 30 Atos de Concentração (ACs) envolvendo regimes de
concessão no setor, sendo 12 após 2020, indicando um impacto positivo do novo marco regulatório.
Apenas 12 casos incluíram algum tipo de análise de concentração. Conclui-se que o Cade consolidou
o entendimento de que o setor possui características de monopólio natural, focando na competição
pelo mercado, em vez de no mercado. Em relação à definição de mercado relevante, o Cade ora
considera os serviços de abastecimento de água e tratamento de esgoto como um mercado único, ora
os analisa separadamente, mas há consenso na dimensão geográfica, entendida como nacional. Por
fim, no que se refere à análise de concentração, nota-se que ainda não há consenso, uma vez que já
12
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
foram aplicadas três metodologias: (i) população atendida; (ii) economias potencialmente atendidas;
e (iii) população equivalente. Considerando a onda de fusões, aquisições e potenciais novos entrantes
no mercado, abre-se uma janela de oportunidade para o Cade passar a adotar uma abordagem mais
clara, a fim de aprimorar sua capacidade de proteger a concorrência e, em última instância, fomentar
a expansão dos serviços de saneamento, bem como seus reconhecidos benefícios sociais.
Palavras-chave: saneamento básico; Cade; análise de concentração; privatização; Sabesp; leilões.
JEL Classification:K21; K23; L40; L43; L95
Summary: 1. Introduction; 2. Cade’s Case Law in the W&S
Sector; 2.1. Overview; 2.2. Structural Characteristics of
Natural Monopoly and Competition for the Market; 2.3.
Definition of Relevant Market; 2.4. Methodologies for
Concentration Analysis; 3. The Sabesp Privatization Case
and Auction Prospects in the W&S Sector; 4. Conclusions;
References; Appendix.
1 INTRODUCTION
Since the approval of Law No.14.026/2020 (New Sanitation Legal Framework) (Brasil, 2020),
the Water and Sanitation (or W&S) sector has gained increasing prominence in Brazil. With the
establishment of a legal framework that encourages investments and greater competition, there has
been a rise in private concession auctions, an increase in investment potential, and the entry of new
players into the market.
According to a study produced by the Instituto Trata Brasil and GO Associados (2024), the New
Sanitation Legal Framework aimed to contribute to legislation that encourages investments in the
sector, with at least five important changes: (i) definition of goals for the universalization of services;
(ii) increased market competition with a ban on new Program Contracts; (iii) greater legal security for
the privatization processes of state-owned companies; (iv) encouragement of regionalized service
delivery; and (v) creation of a prominent role for the National Water and Basic Sanitation Agency
(ANA) in regulating services.
The regionalized service delivery was the model chosen in recent studies conducted by
the National Bank for Economic and Social Development (BNDES) for the states of Alagoas, Rio de
Janeiro, Amapá, and Ceará, which groups several municipalities under a single contract (BNDES, [202-
]). Additionally, BNDES supported at least 13 major concessions and privatization projects, from which
three have already been concluded, and the rest are either scheduled for auction or in the final stages
of structuring. These projects combined represent a total of approximately BRL 115 billion in planned
investments and are expected to benefit an estimated 35.9 million people (Campos Junior, 2024).
The Public-Private Partnership (PPP) of the Paraná Sanitation Company (Paraná […], 2024) involved
112 municipalities in the state and was won by Saneamento Consultoria, Acciona (who entered the
market), and Iguá Saneamento (Iguá […], 2024).
More investments in the sector imply significant multiplier positive eects on the economy.
According to Trata Brasil and GO Associados (2024), the estimated annual investments of R$ 46.3 billion
13
required for the universalization of services – the main goal of the New Sanitation Legal Framework –
could generate GDP growth of around R$ 58.1 billion annually.
Instituto Trata Brasil (2024) also points to several social benefits of access to canalized water
such as: (i) negative correlation with the probability of gastrointestinal diseases such as diarrhea; (ii)
negative correlation with respiratory diseases; (iii) increase in wages of about 3%; (iv) better scores
at the National University Admission Exam (ENEM); (v) increase in real estate value in about 6%; (vi)
increase in the number of employees in the tourism sector. Other studies seem to agree on the social
benefits of sanitation
6
.
In this scenario, notable acquisitions have captured the attention of the national and
international market, including large privatizations such as the one of Companhia Riograndense de
Saneamento (Corsan) which took place in Rio Grande do Sul in 2023, and the one of Companhia de
Saneamento Básico do Estado de São Paulo (Sabesp) which took place in São Paulo in 2024.
This recent trend involving the prospect of new privatizations and auctions over the next
three years, suggests that the Administrative Council for Economic Defense (Cade in Portuguese) will
need to deepen its competitive analyses in the sector, which has historically been characterized by
low concentration, high rivalry, and a predominance of merger cases (concentration acts or ACs in
Portuguese) judged through fast-track proceedings.
This article aims to analyze Cade’s case law since the enactment of Law No.12,529/2011 (Brazilian
Competition Law) to understand its position on three main aspects. First, the structural characteristics
of the W&S sector, which is regulated and regarded as a natural monopoly, with competition for the
market instead of within the market. Second, the definition of the relevant market, in its product and
geographic dimensions. Third, the criteria commonly used for concentration analyses.
In addition, the article presents the outlook for auctions in the sector in the post-Sabesp
privatization scenario, which are expected to generate around BRL 115 billion in investments and
benefit a total of 35.9 million people (Campos Junior, 2024). Other privatizations might take place in
the coming years, such as the one of Companhia de Saneamento of Minas Gerais (Copasa). The aim is
to elucidate to market agents and those interested in pursuing new mergers and acquisitions in the
W&S sector how Cade’s analyses have taken place so far.
To address all these points, the article is structured into four sections, with the first being
this Introduction. Section 2 presents Cade’s case law in the W&S sector. Section 3 discusses in more
detail the case of Sabesp’s privatization
7
, which was approved without restrictions in August 2024, and
presents the privatization and auction prospects in the sector in the coming years. The final section
provides concluding remarks.
6 For instance, according to Galiani, Gertlet and Schargrodsky (2005) and Fujiwara (2005), more investments in the
sector reduced child mortality both in Argentina and Brazil, respectively.
7 Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. All Cade public proceedings mentioned in
this article can be consulted at: https://x.gd/GVzoO.
14
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
2 CADE’S CASE LAW IN THE W&S SECTOR
2.1. Overview
Cade’s case law concerning the W&S sector is relatively extensive. Since 2012, when the
Brazilian Competition Law came into eect, 30 merger cases involving concession regimes in the sector
have been judged
8
. As shown in Graph 1, of this total, 12 cases were notified ater 2020, suggesting
a positive eect from the New Sanitation Legal Framework. In 2023 and 2024 alone (up to August),
disregarding the worst years of the Covid-19 pandemic, eight cases were notified. As discussed later,
the recent trend points to an increase in new entries and investments in the coming years.
Graph 1 - Number of mergers in the W&S Sector per year since the Brazilian Competition Law
Source: Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. Prepared by the
authors.
Regarding the geographical distribution of ACs analyzed by Cade, one can observe a
predominance in the Southeast and South regions: the state of São Paulo leads with 14 cases, followed
by Rio Grande do Sul and Santa Catarina with seven each. Alagoas, Mato Grosso, and Rio de Janeiro
follow, each with six cases (Graph 2). Finally, 11 states (mostly in the North and Northeast) were not
aected by the analyzed operations.
8 This period extends until August 2024, the date of the last consultation for this article. The list excludes cases
involving water and euent treatment solutions for industrial clients, focusing only on municipal-level water supply and
sewage services under concession regimes. For industrial treatment solutions, see, for example: AC No. 08700.001437/2024-61,
AC No. 08700.001424/2024-91, AC No. 08700.004875/2020-57, AC No. 08700.007552/2016-39, AC No. 08700.006646/2016-91, and AC
No. 08700.010354/2013-00, among others.
15
Graph 2 - Geographic Distribution of Mergers in the W&S Sector Analyzed by Cade by Target
Company’s State of Operation
Source: Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. Prepared by the authors.
As for Cade’s decisions, with only one exception (in which the merger case was not
acknowledged), all cases were approved without restrictions (Graph 3). Furthermore, 28 of the 30
merger cases were analyzed under fast-track proceedings. The two cases under ordinary proceedings
were notified in 2018 and involved Aegea Saneamento e Participações S.A. (Aegea)
9
. In these cases,
the ordinary proceedings were adopted because Cade decided to be conservative and considered
the market shares of only private companies. In this scenario, Aegea’s market share exceeded the
threshold of 20% of Cade Resolution No.33/2022
10
. At the end, however, Cade concluded that: (i) there
were lots of competitors in the market; (ii) competition happens for the market (ex-ante); (iii) there
were low entry barriers to participate in bidding processes; and (iv) there was a lack of W&S coverage
in Brazil, which implied large space for competitors and new entries.
Graph 3 - Decisions and Review Procedure at Cade for Mergers in the W&S Sector
Source: Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. Prepared by the authors.
9 AC No. 08700.001557/2018-10 and AC No. 08700.002516/2018-41.
10 Opinion No. 4/2018/CGAA4/SGA1/SG, Case No. 08700.001557/2018-10 and Opinion No. 7/2018/CGAA4/SGA1/SG, Case
No. 08700.002516/2018-41.
16
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
The fact that most cases were analyzed under fast-track proceedings reveals the low
concentration in the sector, which is historically marked by a high number of players nationwide and
a high level of competition for the market. However, it is worth noting that concentration analysis
— which involves evaluating market shares of the applicants before and ater the transaction — has
become relatively more frequent in recent years.
Since the enactment of the Brazilian Competition Law, out of the 30 cases analyzed, 12
cases involved some sort of concentration analysis. Out of these 12, eight were notified ater the
New Sanitation Legal Framework, and six were notified between 2023 and 2024 (up to August). In
addition, in eight of the 12 cases with concentration analyses, Cade assessed both private and public
companies’ market shares, indicating another recent trend.
Table 1 provides a summary with relevant information on the 12 cases with concentration
analyses. In cases where the calculated share exceeded the legal threshold of 20%, the sector’s
competitive rivalry was deemed sucient by Cade to reduce the likelihood of market power being
exercised.
The geographical relevant market was considered national in all cases, while in the product
dimension, water and sewage services were sometimes considered together and sometimes
as separate markets. It is worth highlighting the lack of consensus in Cade’s decisions regarding
methodologies for concentration analyses. As further explored below, three approaches have been
considered: (i) served population, (ii) potentially served economies, and (iii) equivalent population.
Table 1 - Summary of the 12 Merger Cases with Concentration Analyses
# Case No. Applicants
Relevant
Market
(Product)
Relevant
Market
(Geographic)
Concentration
Analysis
Methodology
1 08700.007545/2016-37
Aegea and
Construtora
Aterpa
Water and
sewage
(joint)
National
Combined share
below 20%
Potentially
served
economies
2 08700.001278/2018-56
Aegea and
Construtora
Aterpa
Water and
sewage
(joint)
National
Combined share
above 20%
(but presence of
rivalry)
Potentially
served
economies
3 08700.001557/2018-10 Aegea and Solví
Water and
sewage
(joint)
National
Combined share
above 30%
(but presence of
rivalry)
Potentially
served
economies
4 08700.002516/2018-41
Aegea, Sagua
and OAS
Soluções
Ambientais
Water and
sewage
(joint)
National
Combined share
above 30%
(but presence of
rivalry)
Potentially
served
economies
5 08700.003895/2020-19
BRK Ambiental
and FI-FGTS
Water and
sewage
(joint)
National
Combined share
below 20%
Potentially
served
economies
6 08700.008273/2022-31
Servy
Investments and
N Saneamento
FIP-IE
Water and
sewage
(separate)
National
Combined share
below 10%
Served
population
17
# Case No. Applicants
Relevant
Market
(Product)
Relevant
Market
(Geographic)
Concentration
Analysis
Methodology
7 08700.000339/2023-25
Corsan, Parsan
and Saneamento
Consultoria
Water and
sewage
(joint)
National
Combined share
below 20%
Potentially
served
economies
and
Equivalent
population
8 08700.005128/2023-89
Norte
Saneamento,
Iguá
Saneamento,
Esap, Itapoá
Saneamento
and Tubarão
Saneamento
Water and
sewage
(separate)
National
Combined share
below 20%
Served
population
9 08700.007167/2023-11
Duane do
Brasil, Tubarão
Saneamento
and Iguá
Saneamento
Water and
sewage
(separate)
National
Combined share
below 20%
Served
population
10 08700.000233/2024-11
Terracom and
Saneamento
Ambiental Águas
do Brasil
Water and
sewage
(separate)
National
Combined share
below 10%
Served
population
11 08700.003394/2024-58
Canada Pension
Plan Investment
Board and Iguá
Saneamento
Water and
sewage
(separate)
National
Combined share
below 10%
Served
population
12 08700.005228/2024-96
Equatorial
Energia and
Sabesp
Water and
sewage
(joint)
National
Combined share
below 20%
Potentially
served
economies
and
Equivalent
population
and
Served
population
Source: Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. Prepared by the authors.
In the next subsections, Cade’s perspective on the W&S sector in Brazil will be detailed,
focusing primarily on the 12 cases mentioned above where there was a relatively deeper competitive
analysis. Subsection2.2 provides more details on the authority’s case law regarding the structural
characteristics of the sector, which is marked by a natural monopoly regime and competition for the
market. Subsection2.3 addresses the definition of the relevant market in its product and geographic
dimensions. Subsection2.4 demonstrates the existing lack of consensus on the most appropriate
methodology for the concentration analysis.
18
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
2.2 Structural Characteristics of Natural Monopoly and Competition for the
Market
Cade’s case law is well-established in arming that the W&S sector is characterized by a
natural monopoly regime at the municipal level, given its high fixed costs and low marginal costs.
In this context, services are exclusively provided by a specific concessionaire, in accordance with
the limits defined by the granting authority in concession contracts. This understanding is settled in
Cade’s case law, as revealed by Opinion No.452/2023 recently issued by the General Superintendence
(GS) in the context of AC No.08700.007167/2023-11:
In previous decisions, Cade recognized that services related to sanitation (water
and sewage services) are considered a natural monopoly. In this sense, the activity
is exclusively carried out by the concessionaire, within the limits of the concession
granted by the Public Authority. This is because the specific characteristics of these
activities make it economically unfeasible for more than one concessionaire to be
established and operate in the same locality (Free translation; emphasis added).
Therefore, unlike what occurs in unregulated markets, there is no competition within the
market in this sector, but rather competition for the market, at the public bidding, that is, ex ante,
before the beginning of the operations by the concessionaires. This understanding is also highlighted
in the GS’s opinion:
16. […] By adopting the municipal dimension, it is considered that, as it is a natural
monopoly involving high fixed costs and low marginal costs, only one company can
operate eciently in each locality.
17. However, as it is a natural monopoly, there is competition promoted through
concessions by the Public Authority, which occurs for the market, at the time of public
service bidding, and not within the market […] (Free translation; emphasis added).
These statements by the GS reinforce the understanding that, in the W&S sector, competition
takes place ex ante through bidding procedures rather than in the market itself. This institutional
structure directly shapes how relevant markets are defined and how competitive dynamics should be
assessed. The next section explores how Cade has approached the definition of relevant market in
merger cases, focusing on its product and geographic dimensions.
2.3 Denition of Relevant Market
The relevant market represents the set of agents that eectively respond to the strategies
(e.g., pricing or quantity adjustments) of the resulting company in a given transaction. It is divided
into two dimensions: product and geography. The product dimension, from a supply perspective,
encompasses goods or services produced by companies that, using the same facilities and resources,
can meet the same demand. The geographic dimension, in turn, includes the area where companies
compete
(Cade, 2016).
19
According to the Brazilian Ministry of Regional Development, sanitation services primarily
include the supply of drinking water and sewage treatment
11
, although some companies in the sector
also operate in related areas such as raw water production projects, industrial sanitation market,
urban cleaning and solid waste management, and urban stormwater drainage and management
(Brasil, 2020).
Cade, however, considers that related activities such as the capture and treatment of water
and industrial euents, as well as the development of private solutions for industries, do not align
with sanitation services
12
. Thus, in the product dimension, the market is typically defined by the
Brazilian authority as water supply and/or sewage treatment services. Water and sewage networks
are considered together since “their operators generally engage in both activities, which eliminates
the need for segmentation into multiple markets”
13
, however, there are precedents where water and
sewage services were analyzed separately
14
.
Although case law is not consolidated on this matter, the approach of treating water and
sewage services jointly seems to be reasonable. The same concessionaires usually provide both
services, unlike waste and drainage services, which are typically performed independently. Moreover,
there is a strong integration between the two activities, especially commercially since water and
sewage charges are billed on the same account.
Considering that it is a market of service provision, rather than the production and
commercialization of a product, and that there are no geographical limits in terms of operations — a
company with the know-how for providing these services can easily develop projects in any region —
competition for the market usually involves players throughout the national territory and, depending
on the bidding conditions, international players.
As highlighted by Cade: “[A]ccording to precedents, the geographic dimension of the market
in question can be seen in a broader, national scope, which may even include the participation of
international players”
15
. Additionally, in general, Cade recognizes that water and sewage services in a
given concession can be performed by both public and private companies, which justifies the recent
trend toward preferring concentration analysis involving more players.
Thus, concerning the geographic dimension, when considering competition within the market,
Cade defines the market at the municipal level, where — being a natural monopoly—only one company
operates in each municipality. However, as the focus is on competition for the market, the geographic
dimension for competitive analysis is defined as national, as it involves competition in bids where a
variety of players, including public and private, national, and international, can participate. Table 2
summarizes the two dimensions of the relevant market considered by Cade in merger cases involving
the W&S sector.
11 As stated in the report Diagnóstico Temático Serviços de Água e Esgoto, this service consists of “the activities and
the provision and maintenance of the infrastructure and operational facilities necessary for the public supply of drinking water,
from collection to household connections and their measuring instruments” (Brasil, 2023, p. 6).
12 See, for example: AC Nos. 08700.001437/2024-61, 08700.001424/2024-91, 08700.004875/2020-57, 08700.007552/2016-39,
08700.006646/2016-91, and 08700.010354/2013-00.
13 Opinion No 452/2023/CGAA5/SGA1/SG. Case No 08700.007167/2023-11.
14 See, for example: AC Nos. 08700.008273/2022-31, 08700.005128/2023-89, 08700.007167/2023-11, 08700.000233/2024-11,
and 08700.003394/2024-58.
15 Supra note 8.
20
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
Table 2 - Summary of the Relevant Market in Mergers Involving the W&S Sector
Mode of
Competition
Product
Dimension
Geographic
Dimension
Within the market
Water supply
and/or sewage
treatment services
Municipal
For the market
Water supply
and/or sewage
treatment services
National
Source: Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. Prepared by the authors.
2.4 Methodologies for Concentration Analysis
The structural characteristics of the W&S sector and the dynamics of competition for the
market imply a dispersed market at the national level, which explains the low concentration levels
and low probability of competitive risks arising from mergers notified to Cade. As a result, Cade’s
precedents do not show in-depth analyses or consolidated guidelines regarding, for example, the
methodology for market share analysis, even in the two merger cases assessed under ordinary
proceedings.
As presented in Table 1, Cade has adopted three distinct methodologies for concentration analysis
in cases notified since the enactment of the Brazilian Competition Law: (i)served population; (ii)potentially
served economies; and (iii)equivalent population. Each of these methodologies will be presented below,
including the respective calculation methods and the indicators from the National Sanitation Information
System of the Ministry of Cities (SNIS in Portuguese) used as the basis for the calculations.
Served Population
The market share of a given player p ∈ {1,…,P} is calculated by dividing the served population
variable for this specific player by the total population served by all P players in the market:
The variable Served Population
p
is constructed for water or sewage services based on
indicators AG001 (total population served with water supply) and ES001 (total population served with
sewage treatment) from SNIS, respectively:
21
Where n ∈ {1,…,N} represents each municipality in the country mapped in the SNIS database.
The Equity Share
np
, which represents the equity share of player p in the water and/or sewage
concession in municipality n , can be included in the calculation to account for the possibility of
consortia formed by more than one player. However, this variable is not typically used or explicitly
mentioned in Cade’s precedents that use this methodology.
It is worth noting that the served population methodology considers the population eectively
served by water or sewage networks, as they are distinct indicators extracted from the SNIS database.
Since this number is not necessarily the same for both networks, the analysis is conducted separately
for each of these markets, which contrasts with the more commonly used relevant market definition
in the product dimension that includes both services in an integrated manner.
Another limitation of this methodology is that, by considering the population eectively
served, it only accounts for the existing coverage in the municipalities, not reflecting the potential
market of each player in their concessions. Nonetheless, Cade’s case law reveals that this is the most
used metric in cases involving the W&S sector
16
.
Potentially Served Economies
Similarly, the market share of a given player p is calculated by dividing the potentially served
economies of this specific player by the total potentially served economies in the entire market:
The variable Potentially Served Economies
p
(orPSE
p
), in turn, is constructed from the SNIS
indicator AG003 (number of active water connections):
Where Service
n
in municipality n is a binary variable equal to 1 if only water or sewage services
are provided in that municipality, and equal to 2 if both are provided. As with the served population
methodology, Equity Share
np
can be included in the equation to represent player p’s equity in the
concession in municipality n, although it is not commonly used or explicitly mentioned in Cade’s
precedents.
It should be noted that the AG003 indicator is used for both water and sewage services,
because the services are sometimes considered similar or integrated, so that the level of water market
coverage is considered a proxy for the potential sewage market
17
. Thus, in municipalities where only
water is granted or only sewage is granted, the equation for potentially served economies for a given
player becomes (Service
n
=1):
16 Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96.
17 However, in AC No. 08700.003895/2020-19, the variables AG003 and ES003 (number of active sewage connections)
were used separately for the analysis of potentially served economies. In this case, for municipalities where both water and
sewage concessions existed, the variables AG003 and ES003 were added instead of multiplying the variable AG003 by 2.
22
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
And in municipalities where both water and sewage are granted, the equation for potentially
served economies for a given player is given by (Service
n
=2):
SNIS defines economies as “dwellings, apartments, commercial units, oce rooms, industries,
public agencies, and the like [...] that are served by water supply and/or sewage services”. Active
economies are defined as those economies that were connected and served by the water or sewage
network, as applicable, in the reference year. (Brasil, 2020).
The use of the active economies indicator is justified because economies — not people —
are the units directly served by the players in the W&S sector. However, like the served population
methodology, this approach also does not consider the potential demand that could be met by
new entrants or by the expansion of services of existing players in their respective concessions.
Thus, the term potentially in “potentially served economies” only refers to the potential sewage
demand compared to the existing water demand in that market, as the AG003 indicator (active water
connections) is used for both water and sewage
18
.
Equivalent Population
As in the other methodologies, the market share of a given player p is calculated by dividing
the equivalent population of this specific player by the total equivalent population of all P players in
the market:
The variable Equivalent Population
p
is constructed from the “POP_URB” indicator (urban
population of the municipality in the reference year) calculated by the Brazilian Institute of Geography
and Statistics (IBGE in Portuguese) and available in the SNIS database. This variable includes the
entire urban population of the municipality, meaning both those served and not served by sanitation
services.
The choice of urban rather than total population (i.e., urban, and rural population) considers
the fact that most existing contracts in the W&S sector cover only urban areas. Public water supply
services (water and sewage systems, including networks), thus, cover only urban areas. In rural areas,
solutions tend to be individual (such as wells or septic tanks). Therefore, urban population data provide
a more accurate representation of the areas serviced under concession contracts in the W&S sector.
18 Opinion No. 7/2018/CGAA4/SGA1/SG. Case No. 08700.002516/2018-41.
23
Mathematically, the equivalent population variable Equivalent Population
p
can be described as:
Where, as with potentially served economies, Service
n
in municipality represents a binary
variable equal to 1 if only water or sewage services are provided in that municipality, and equal to 2
if both are provided. Equity Share
np
may represent the equity share of player p in the concession of
municipality n.
Since the equivalent population methodology relies on the municipality’s urban population
to estimate each player’s market and considers water and sewage services in an integrated manner
(as the potentially served economies methodology), this approach captures the potential market
for both water and sewage services available in each municipality. Table 3 summarizes the main
characteristics of the three methodologies considered by Cade.
Table 3 - Summary of the Main Characteristics of the Three Methodologies for Concentration
Analysis at Cade
Methodology
Considers National
in Geographic
Dimension?
Considers Water
and Sewage in
Product Dimension?
Considers Potential Market?
Served Population Yes No No
Potentially Served Economies Yes Yes
No (for sewage assumes
water as reference)
Equivalent Population Yes Yes Yes
Source: Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. Prepared by the authors.
The consideration of the potential market makes sense in the W&S sector in Brazil for two main
reasons. First, although sanitation concession contracts do not necessarily mandate the service of the
entire population of a given municipality within a specific period, they usually allow concessionaires
to accelerate service provision up to the full municipal population during the contract’s term.
Second, in addition to a concessionaire’s right to full-service coverage, the New Sanitation
Legal Framework set service targets of 99% of the population with drinking water and 90% of
the population with sewage collection and treatment by December 31, 2033, implying a trend of
incorporating universalization goals in concessions equal to or exceeding those of the New Sanitation
Legal Framework.
For the sake of illustration, examples of market share calculations in the sector based on the
equivalent population methodology are presented below.
Example of Equivalent Population Calculation for Each Service Provider
The first steps in calculating market share using the equivalent population methodology
involve selecting the municipalities with water, sewage, or both types of concessions listed in the
SNIS database and gathering the respective POP_URB data. Once these steps are completed, the next
step is to identify the respective service provider(s). An illustrative example is provided below.
24
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
Suppose that in the municipality of Timon, located in the state of Maranhão (MA), the provider,
Company A, is a private company responsible for both water and sewage services. As both services are
provided, we consider Service
n
= 2. Thus, according to SNIS data, with 2021 as the reference year, the
total equivalent population in this municipality for Company A is calculated as 148,917 × 2 = 297,834.
In the case of Blumenau, located in the state of Santa Catarina (SC), the provider is Company
B, a private company that exclusively provides sewage services. Water services in this municipality
are handled by Company C, a public company. Since Company B only provides sewage services, we
consider Service
n
= 1. Therefore, the total equivalent population in this municipality for CompanyB
is calculated as 366,418 × 1 = 366,418. This same calculation applies to CompanyC. This illustrative
example is summarized in Table 4.
Table 4 - Hypothetical Example of Equivalent Population Calculation
Municipality
(State)
Reference
Year
Provider
Type of
Provider
Service
Urban
Population
Equivalent
Population
Timon (MA) 2021 Company A Private Water and Sewage 148,917 297,834
Blumenau (SC) 2021 Company B Private Sewage 366,418 366,418
Blumenau (SC) 2021 Company C Public Water 366,418 366,418
Source: SNIS, 2021. Prepared by the authors.
However, there might be cases where the operator responsible for the sanitation service
concession in the municipality has more than one partner, either through a consortium formed at the
time of bidding or through the future acquisition of equity in the concessionaire. Thus, to distinguish
the total equivalent population served by each player, if market data is available, it is also possible
to create scenarios by weighing the total calculated for each municipality by the equity stake in each
concessionaire
19
.
Table 5 presents an example of a municipality with more than one controller, Água Santa,
located in the state of Rio Grande do Sul (RS), and compares it to the case of Timon (MA) mentioned
previously. Following the transaction involving Aegea, Perfin, and Kinea during the privatization of
Corsan, the shares in the concession of the municipality of Água Santa (RS) were distributed as 75% to
Aegea, 20% to Perfin, and 5% to Kinea
20
. Since the concession includes both water and sewage services,
the urban population is multiplied by 2 to find the equivalent population. Finally, the result is weighted
according to each player’s stake. Thus, the municipality has an equivalent population of 1,453 × 2 =
2,906, of which 75% corresponds to Aegea (2,179.5), 20% to Perfin (581.2), and 5% to Kinea (145.3).
19 Such breakdown can be performed for all controllers holding stakes in any concessionaire in Brazil, including fi-
nancial market players such as investment funds. However, Cade usually prioritizes more conservative approaches in terms of
competition risks.
20 Opinion No. 43/2023/CGAA5/SGA1/SG. Case No. 08700.000339/2023-25.
25
Table 5 - Example of Equivalent Population Calculation in a Concession with More Than One Controller
Municipality (State)
Reference
Year
Providers
Type of
Provider
Service Share
Urban
Population
Equivalent
Population
Timon (MA) 2021 Company A Private
Water and
Sewage
100% 148,917 297,834
Água Santa (RS) 2021 Aegea Private
Water and
Sewage
75% 1,453 2,179.5
Água Santa (RS) 2021 Perfin Private
Water and
Sewage
20% 1,453 581.2
Água Santa (RS) 2021 Kinea Private
Water and
Sewage
5% 1,453 145.3
Source: AC No. 08700.0003339/2023-25 based on SNIS and Aegea, 2023. Prepared by the authors.
In the case of Corsan’s privatization, the company was acquired by a consortium formed by
non-operational vehicles owned by Aegea (75%), Perfin (20%), and Kinea (5%). Using the consortium’s
shares and the 2021 SNIS database, the equivalent population methodology was applied, yielding the
results shown in Table 6. As the resulting concentration was below 20%, the transaction was classified
as a fast-track procedure and approved without restrictions by Cade
21
.
Table 6 - Market Shares in the Corsan Privatization Case
Providers
Equivalent Population Market Share
Pre-Operation Post-Operation Pre-Operation Post-Operation
Corsan 11,202,837 0 3.12% 0.00%
Aegea 37,992,667 46,394,795 10.58% 12.92%
Perfin 0 2,240,567 0.00% 0.62%
Kinea 0 560,142 0.00% 0.16%
Source: Opinion No. 43/2023/CGAA5/SGA1/SG. Case No. 08700.000339/2023-25. Prepared by the authors.
Bottom Line
As indicated above, the equivalent population methodology has the advantage of incorporating
the potential market each player could access within their respective water and/or sewage concessions
into the market share analysis. By considering the potential market, this methodology aligns not
only with Cade’s relevant product market definition but also with the service delivery model and
universalization objectives characteristic of the W&S sector.
However, this approach alone has limitations. While it captures the potential market, it does
not necessarily reflect the actual service provision and, consequently, the actual market shares, which
is important for the competition authority to take into consideration. For that matter, an approach
that relies on active economies would be a better fit, since these are the units who are eectively
connected to and served by the water or sewage network. Therefore, a combination of methodologies
may be beneficial, allowing Cade to analyze dierent market scenarios.
21 Supra note 15.
26
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
This need for a dual perspective is aligned with Benitez and Estache’s (2005) assessment
for the World Bank on market concentration in infrastructure sectors. In their analysis of water and
sanitation markets, they propose two proxies for market share calculation: the population covered
and the total population. The population covered represents an upper bound, reflecting the maximum
concentration among existing providers, while the total population serves as a lower bound, capturing
potential competition and expansion opportunities in underserved areas.
Similarly, PSI & PRACTICA Foundation Practices, Research and Operations in Water, Sanitation
and Hygiene (Pro-Wash, 2021), assessed the size of a sanitation market for investment purposes,
emphasizing the importance of considering both the potential market and the actual service units.
They recommend using demographic data, such as total population and population growth rate,
as key indicators of market potential, while also refining this proxy by considering households as
the actual service units in the sanitation sector. This distinction ensures a clearer picture of both
theoretical market expansion and existing service provision, oering a more robust basis for market
analysis and investment decisions.
As discussed before, on one hand, the equivalent population methodology captures the
potential market, but it may overestimate service reach. On the other hand, the potentially served
economies methodology measures actual service units connected and paying for sanitation, but it
does not consider the potential market. A dual approach might enable Cade to evaluate competition
dynamics more eectively in the W&S sector, ensuring that consolidation does not compromise
service quality or access.
In any case, it is important to note that all existing methodologies have limitations, such as
the reliance on self-reported data in the SNIS survey. This data may not cover all municipalities and
W&S service providers, potentially introducing some noise. Nevertheless, this limitation is somewhat
mitigated by the representativeness of the database. According to a SNIS report of 2022, the survey
covered 97.9% of municipalities and 99.3% of the Brazilian population (Brasil, 2023).
Additionally, since the sanitation sector involves competition for the market, there could
be a multitude of potential new players not accounted for in the market share analysis (who may
operate not only in other infrastructure sectors but also in the financial market) and who would be
fully capable of participating in future bids. This tends to overestimate the perceived market power of
incumbent players more than in unregulated markets with competition within the market.
3 THE SABESP PRIVATIZATION CASE AND AUCTION PROSPECTS IN THE
W&S SECTOR
Sabesp has been in existence for 50 years and operates in all regions of the state of São Paulo,
serving a total of 375 municipalities and 28 million people in water distribution, sewage collection,
and treatment (São Paulo, 2023). It is the largest water and sewage company in the Americas, ranks
among the five largest globally in terms of revenue, and is the leading investor in W&S in Brazil,
accounting for 33% of total investments, considering the 2011-2020 SNIS average.
Given the changes brought by the New Sanitation Legal Framework and the need to reposition
the company following the expiration of the so-called “Contratos de Programa”
22
, the state government
22 “Contratos de Programa” are agreements signed between municipalities (which hold the rights to water and sanita-
27
of São Paulo decided to privatize Sabesp to achieve: (i) an increase in investments to BRL 66 billion
to accelerate the universalization of sanitation to 2029, including rural areas and irregular urban areas
currently unserved (as opposed to BRL 56 billion by 2033 in the original plan); (ii) a reduction in water
taris; and (iii) strengthening and leveraging the company so it can operate nationwide and internationally.
Thus, on July 22, 2024, following studies conducted by the International Finance Corporation
(IFC) to assess the best business model for the privatization, the company’s public share oering was
finalized. Equatorial Energia S.A. (Equatorial) was the sole participant
23
and won the bid, acquiring a
15% stake in Sabesp’s capital stock (Napoli, 2024).
On July 23, the transaction was notified to Cade. It is worth noting that this privatization falls
under the type of merger case described in item II of article 90 of the Brazilian Competition Law.
Moreover, the Sabesp case fits under letter (a) of item II of article 10 of Cade Resolution No.33/2022,
which mandates notification for cases where the acquisition results in a direct or indirect stake of 5%
or more in the voting or equity capital of a competing company
24
.
Table 7 provides an estimate of market shares in the sanitation sector prior to Sabesp’s
privatization, using data broken down by company during the privatization of Corsan, the most
significant recent transaction in the sector before Sabesp. The post-Corsan transaction data were
provided by the applicants (Aegea, Perfin, and Kinea) based on the 2021 SNIS database and consider
the equivalent population approach.
25
The data show that Sabesp ranked first with a 16.90% share of the national market, while
Equatorial held only 0.34%, according to 2021 SNIS estimates. Following the privatization, the
combined market share would be 17.24%, remaining below Cade’s 20% threshold for horizontal
mergers. Additionally, the Herfindahl-Hirschman Index (HHI) variation was less than 100, classifying
the transaction as a “small change in concentration,” which, according to Cade, is unlikely to result in
adverse competitive eects (Cade, 2016).
Table 7 - Market Share Based on Equivalent Population
Provider Share
Sabesp 16.90%
Aegea 12.92%
Copasa 7.65%
Embasa 5.36%
Sanepar 5.17%
BRK Ambiental 3.58%
Compesa 3.09%
tion services) and State Basic Sanitation Companies (CESB), established without a bidding process. For more details on these
agreements, see, for example, Loureiro (2020).
23 More information about Aegea’s withdrawal is available at Napoli (2024).
24 Under Article 89 of the Brazilian Competition Law, Cade regulates the prior analysis of concentration acts for auc-
tions, tenders, and public stock acquisitions. However, per Article 108 of Cade’s Internal Regulations, public oerings are not
subject to prior approval. Paragraph 1 clarifies that the exercise of political rights linked to the acquired stake is prohibited un-
til Cade approves the transaction. Thus, while Cade does not analyze public oerings in advance, as in Sabesp’s case, political
rights related to the acquisition may require approval depending on the stake acquired (Brasil, 2011).
25 Opinion No. 43/2023/CGAA5/SGA1/SG. Case No. 08700.000339/2023-25.
28
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
Saneago 3.07%
Cagece 2.14%
Águas do Brasil 2.00%
Caema 1.77%
Caesb 1.66%
Cagepa 1.64%
Perfin 0.62%
Kinea 0.16%
Corsan 0.00%
Equatorial 0.34%
Others* 31.91%
Total 100%
Source: Opinion No. 43/2023/CGAA5/SGA1/SG. Case No. 08700.000339/2023-25. Adapted by the
authors to consider only the post-operation scenario of Corsan. (*) The “Others” category includes
all market players with a share below 1.64%, excluding Perfin and Kinea (as the applicants’
calculations accounted for the dierent players in the Aegea consortium that won the bid), as well
as Equatorial (whose estimated 0.34% share was subtracted from the original “Others” total of
32.25% and specified separately in the table).
In the notification form for the acquisition of Sabesp shares by Equatorial, market shares
in the W&S sector
26
were presented based on 2022 SNIS database using the three previously
discussed methodologies: (i) served population; (ii) potentially served economies; and (iii) equivalent
population.
27
-
28
As expected, Tables 8 and 9 show that the combined shares reported by the applicants
ranged between 10% and 20% for the three methodologies, except in the case of sewage using the
served population approach, which fell within the 20-30% range. However, according to the GS: “[...]
above 20%, but below 50%, and with an HHI variation of less than 200 points, which allows us to rule
out a causal link between this transaction and potential adverse competitive eects”
29
-
30
.
Table 8 - Market Shares of Equatorial and Sabesp (Served Population)
Company
Served Population
(Water) (2022)
Share
Served Population
(Sewage) (2022)
Share
Equatorial Group Restricted Access 0-10% Restricted Access 0-10%
Sabesp 28,000,000 16.3% 24,700,000 22.06%
Combined Restricted Access 10-20% Restricted Access 20-30%
26 The transaction also involved overlaps in the electricity generation market (Equatorial: 0.87%; Sabesp: 0.01%, based
on 2023 installed capacity data) and the electricity distribution market (Equatorial: 0.13%; Sabesp: 0.10%, based on 2023 data).
27 Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96.
28 As shown in Table 3, the relevant market considered consists of water supply and sewage treatment services, analyzed
separately for the served population and integrated in other cases. The geographic dimension is municipal for competition in
the market and national for competition for the market.
29 Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96
30 Cade Resolution No. 33/2022, in item V of article 8, allows a transaction to be approved through a fast-track procedure
when horizontal mergers result in an HHI variation of less than 200 points, provided the transaction does not lead to control
of more than 50% of the relevant market.
29
Total 171,000,000 100% 112,800,000 100%
HHI Restricted Access
Restricted
Access
Restricted Access
Restricted
Access
Source: Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. Prepared by the authors.
Table 9 - Market Shares of Equatorial and Sabesp (Potentially Served Economies and
Equivalent Population)
Company
Potentially Served
Economies (2022)
Share
Equivalent
Population (2021)
Share
Equatorial
Group
Restricted Access 0-10% Restricted Access 0-10%
Sabesp Restricted Access 10-20% Restricted Access 10-20%
Combined Restricted Access 10-20% Restricted Access 10-20%
Total 140,339,028 100% 180,824,439 100%
HHI Restricted Access Restricted Access Restricted Access Restricted Access
Source: Opinion No. 385/2024/CGAA5/SGA1/SG. Case No. 08700.005228/2024-96. Prepared by
the authors.
Thus, as with the vast majority of Cade precedents involving the W&S sector, there was no in-
depth competitive analysis, and the privatization of Sabesp was approved without restrictions.
Following the completion of Sabesp’s privatization, the W&S shited its focus to other
concessions and PPPs. As of July 2024, at least 13 major projects were in the pipeline, either scheduled
for auction or in the final stages of structuring, representing a combined total of approximately BRL
115 billion in planned investments (Campos Junior, 2024). According to Instituto Trata Brasil and GO
Associados
(2024), these projects are expected to benefit an estimated 35.9 million people. The largest
coming auctions in the sector are in Pará (BRL 26 billion in planned investment) and Pernambuco (BRL
24.8 billion).
Since then, as shown in Table 10, three of the 13 auctions scheduled to take place in the sector
post-Sabesp privatization have already occurred: Sergipe, an auction involving 74 municipalities won
by Iguá Saneamento
(Igua […], 2024); Piauí, an auction involving 224 municipalities won by Aegea (the
sole bidder)
(Aegea, 2025); and the PPP of the Paraná Sanitation Company (Sanepar), involving 112
municipalities in the state and won by Saneamento Consultoria, Acciona (who entered the market),
and Iguá Saneamento.
Table 10 - Pipeline Projects in the W&S Sector Post-Privatization of Sabesp
Project State Type Services
Estimated
CAPEX
(BRL million)
Population
(million)
Expected
Date
Pernambuco PE Concession Water and Sewage 24.7 9.2 1T/2025
Pará PA Concession Water and Sewage 26 6.1 3T/2025
Maranhão MA Concession Water and Sewage 18.7 4.8 2T/2026
Sergipe SE Concession Water and Sewage 6.3 2.3 3T/2024*
Paraíba PB Concession Water and Sewage 5.7 2.2 1T/2025
30
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
Piauí PI Concession Water and Sewage 8.6
31
1.8 4T/2024*
Rio Grande do Norte RN Concession Water and Sewage 3.2 1.6 1T/2026
Porto Alegre RS Concession Water and Sewage 5.2 1.5 4T/2024
Rondônia RO Concession Water and Sewage 5.8 1.5 1T/2025
Goiás GO PPP Sewage 6.6 1.4 4T/2025
Bloco de Referência
do Vale do
Jequitinhonha
MG Concession Water and Sewage Not available 1.4 2025/26
Sanepar PR PPP Sewage 2.9 1.0 4T/2024*
Feira de Santana e
Região
BA PPP Sewage Not available 0.859 2025/26
Total (approximate) 114.0 35.9
Source: Instituto Trata Brasil and GO Associados, 2024. Prepared by the authors. (*) auctions that
have already taken place by the date of preparation of this article.
The Sabesp´s case and the listed projects in the BNDESs pipeline (BNDES, [202-]), reveals
what should the agents in the market to expect in the near future. The listed projects, when combined
with the privatization of Sabesp, have the potential to impact more than 66 million people and are
expected to be completed within the next three years. As with the Sanepar case, these projects may
lead to the entry of new players into the market (like Acciona) or an increase in the market power
of incumbent players, such as Iguá Saneamento and Aegea, the winners of the Sergipe and Piauí
auctions (Pedrosa, 2024.)
Finally, the W&S sector in Brazil might also face new privatizations in the coming years. The
state-owned W&S company from the state of Minas Gerais, Copasa, is the most likely to be the first
ater Sabesp
32
. Since the company accounts for approx. 7,65% of the national market, the current third
largest player, its sale will undoubtedly have a significant impact on the sector. There are rumors that
Aegea might be one of the interested parties
33
.
4 CONCLUSIONS
This article analyzed Cade’s case law since the enactment of Brazilian Competition Law to
understand the Brazilian competition authority’s stance on the W&S sector. In light of the approval of
the New Sanitation Legal Framework in 2020, the recent privatizations of Corsan and Sabesp, and the
prospect of a series of concession and PPP auctions in the sector over the next three years, as well
as potential new privatizations, it is expected that the authority will have to deepen its competitive
analyses in the near future.
Since 2012, Cade has analyzed 30 cases involving concession regimes in the sector, 12 of
which occurred ater 2020, suggesting a positive impact of the new regulatory framework. These cases
predominantly involve the Southeast and South regions, particularly São Paulo (14 cases), Rio Grande
do Sul, and Santa Catarina (7 each). The new auctions in the sector somewhat counterbalance this
31 Updated ater the auction concluded on 30/10/2024.
32 More information about Minas Gerais’ state government plan to privatize the company is available at Arbex (2024) or
Purchio (2024).
33 See, for instance, Bethônico (2024).
31
finding, as most are expected to occur in the Northeast and North regions.
Regarding Cade’s decisions, with only one exception (where the case was dismissed), all cases
were approved without restrictions, and 28 cases were analyzed under a fast-track procedure. High
rivalry in the sector was used by Cade as an argument to mitigate competition risks in the only two
cases that exceeded the 20% horizontal concentration threshold.
Although most cases have been analyzed under the fast-track procedure - indicative of the
sector’s historically low concentration - concentration analyses have become increasingly frequent
in recent years. Of the 30 cases reviewed since 2012, 12 involved some sort of concentration analysis,
with eight occurring ater the new framework’s enactment, and six being notified between 2023 and
August 2024. These cases allowed a more in-depth evaluation of Cade’s position on competitive
dynamics in the sector, particularly concerning three aspects: (i) structural characteristics of Brazil’s
sanitation sector; (ii) definition of the relevant market, in its product and geographic dimensions; and
(iii) criteria commonly used for concentration analyses.
Regarding the structural characteristics of W&S, it was shown that, given the high fixed costs
and low marginal costs, Cade has established the understanding that the sector exhibits characteristics
of a natural monopoly, at the municipal level. Unlike unregulated markets, Cade understands that
competition exists “for the market” rather than “within the market”, during the bidding for services,
that is, ex-ante to the beginning of the concessionaire operations.
Cade’s approach to defining the relevant market is more consistent in its geographic
dimension than its product dimension. Considering that this is a service provision market rather
than a production and commercialization of goods, and with no geographic operational boundaries,
competition for the market typically involves players across the national territory, and, depending on
the bidding conditions, international players. Thus, Cade has focused its competitive analyses on the
national geographic dimension.
For the product dimension, Cade understands that activities related to water and industrial
euent capture and treatment, as well as the development of private solutions for the industry, do
not align with sanitation services. Cade generally includes only water supply and/or sewage treatment
services in the relevant market. That is, there are precedents where water and sewage networks are
considered together, while in others, water and sewage services are analyzed separately.
Regarding concentration analyses, Cade has already employed three methodologies: (i)
population served; (ii) potentially served economies; and (iii) equivalent population. The latter is the
only one that simultaneously considers the relevant market’s geographic dimension as national, the
product as integrated water and sewage services, and, in line with the goals set by the New Sanitation
Legal Framework, the potential market to be served by the concessionaire.
However, this approach alone has limitations. While it captures the potential market, it does
not necessarily reflect the actual service provision and, consequently, the actual market shares, which
is important for the competition authority to take into consideration. Therefore, and in line with the
literature, a dual approach that considers both potential and actual market shares would enable Cade
to evaluate competition dynamics more eectively in the W&S sector, ensuring that consolidation
does not compromise service quality or access.
32
OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
https://doi.org/10.52896/rdc.v13i1.1903
The case of Sabesp’s privatization in July of 2024 marked a milestone in this discussion as
it involves the company that previously held the largest market share in the sector. Having been
acquired by Equatorial (and not by Aegea, the largest private player in the sector and initially among
the candidates to acquire Sabesp shares but who withdrew before the auction), which held only about
0.34% of the market, the case did not exceed the 20% horizontal merger threshold and, therefore, did
not require in-depth competitive analysis.
Looking at the near future, the concession and PPP auctions in the sanitation pipeline suggest
that the coming years will be dynamic. The listed projects, when combined with Sabesp’s privatization,
have the potential to impact more than 66 million people. These auctions may lead to the entry of
new players or further market consolidation, increasing the likelihood of cases qualifying for ordinary
review procedures. In this context, Cade will be called upon to deepen its competitive analysis. The
expected privatization of Copasa – currently the third-largest player with 7.65% of the national market
– might be an opportunity for adopting a more rigorous analytical framework.
In this evolving landscape establishing clearer methodological guidelines will be essential to
ensure that market dynamics remain aligned with the goals of universalization and improved service
quality. While the population served methodology has provided a useful snapshot of the current
market structure, it may fall short in capturing competition risks in a rapidly changing sector.
To better reflect both service provision and market potential, Cade should consider
institutionalizing a dual, more comprehensive approach, combining potentially served economies
(which reflect actual service connections) with the equivalent population metric (which considers the
potential market).
Such a framework could enhance Cade’s ability to capture the dynamics of this sector,
complementing regulatory eorts to prevent harmful consolidation that could limit access or
undermine service quality – key concerns as Brazil advances toward its universalization targets.
Considering the wave of mergers, acquisitions, and potential new market entrants on the horizon, this
is a timely opportunity for Cade to adopt a clearer and more robust approach to market share analysis
in the sector. By doing so, it could enhance its capacity to safeguard competition and, ultimately,
foster the expansion of W&S services as well as their recognized social benefits.
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OLIVEIRA, Gesner; OLIVEIRA, Rafael Pereira; ANDRADE, José Matheus; PEREIRA, Fernanda Romero
G. A review of Cade's case law in the Water and Sanitation sector: a lack of consensus, the
Sabesp’s case, and what to expect in the near future. Revista de Defesa da Concorrência,
Brasília, v. 13, n. 1, p. 10-35, 2025.
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APPENDIX
Table 11 includes all mergers analyzed by Cade involving the W&S sector since the Brazilian
Competition Law came into eect in 2012 up to August 2024.
Table 11 - Merger Cases in the W&S Sector (under the Brazilian Competition Law)
# Case No. Notification Date Applicants Procedure Decision
1 08700.005308/2013-99 06/17/2013
OAS Soluções Ambientais
and Sanear Saneamento
de Araçatuba
Fast-track
Approved without
restrictions
2 08700.006940/2014-30 08/21/2014 SAAB and Águas de Itu Fast-track
Approved without
restrictions
3 08700.011551/2014-27 12/17/2014 CSN, SAAB and Solví Fast-track
Approved without
restrictions
4 08700.012152/2015-64 12/11/2015
GS Inima and OAS
Soluções Ambientais
Fast-track
Approved without
restrictions
5 08700.012223/2015-29 12/14/2015
I-Ambiental and Queiroz
Galvão
Fast-track
Approved without
restrictions
6 08700.001301/2016-41 02/25/2016 Serrana Águas and Aegea Fast-track
Approved without
restrictions
7 08700.004506/2016-88 06/16/2016
Odebrecht Ambiental and
Campo Novo RJ
Fast-track
Approved without
restrictions
8 08700.007491/2016-18 11/09/2016
BR Ambiental, Brookfield
and Odebrecht
Fast-track
Approved without
restrictions
9 08700.007545/2016-37 11/11/2016
Aegea and Construtora
Aterpa
Fast-track
Approved without
restrictions
35
# Case No. Notification Date Applicants Procedure Decision
10 08700.002198/2017-37 04/10/2017
BR Ambiental and Faria
Lima 1355 FIP
Fast-track
Approved without
restrictions
11 08700.006569/2017-50 10/19/2017
Developer and Queiroz
Galvão
Fast-track
Approved without
restrictions
12 08700.001278/2018-56 02/27/2018
Aegea and Construtora
Aterpa
Fast-track
Approved without
restrictions
13 08700.001557/2018-10 03/07/2018 Aegea and Solví Ordinary
Approved without
restrictions
14 08700.002516/2018-41 04/18/2018
Aegea, Sagua and OAS
Soluções Ambientais
Ordinary
Approved without
restrictions
15 08700.004803/2018-95 08/06/2018
Iguá Saneamento and
Alberta Investment
Fast-track
Approved without
restrictions
16 08700.001267/2019-57 03/01/2019 Marubeni and AGS Fast-track
Approved without
restrictions
17 08700.002965/2019-70 06/06/2019
GS Inima and BRK
Operações Industriais
Fast-track
Approved without
restrictions
18 08700.003363/2019-30 07/02/2019
South American Waste
Investments, Green
Partners, Americas Waste
Management and Solví
Fast-track
Approved without
restrictions
19 08700.003895/2020-19 08/19/2020
BRK Ambiental and FI-
FGTS
Fast-track
Approved without
restrictions
20 08700.001498/2021-85 03/22/2021
Canada Pension Plan
Investment Board and
Iguá Saneamento
Fast-track
Approved without
restrictions
21 08700.008273/2022-31 10/21/2022
Servy Investments and N
Saneamento FIP-IE
Fast-track
Approved without
restrictions
22 08700.000169/2023-89 01/05/2023
Norte Saneamento and
BRK Ambiental
Fast-track Not received
23 08700.000339/2023-25 01/11/2023
Corsan, Parsan and
Saneamento Consultoria
Fast-track
Approved without
restrictions
24 08700.001893/2023-20 03/14/2023
Acciona Água, N.
Saneamento FIP-IE and
aQuali
Fast-track
Approved without
restrictions
25 08700.005128/2023-89 07/17/2023
Norte Saneamento, Iguá
Saneamento, Esap, Itapoá
Saneamento and Tubarão
Saneamento
Fast-track
Approved without
restrictions
26 08700.007167/2023-11 10/11/2023
Duane do Brasil, Tubarão
Saneamento and Iguá
Saneamento
Fast-track
Approved without
restrictions
27 08700.000233/2024-11 01/10/2024
Terracom and Saneamento
Ambiental Águas do Brasil
Fast-track
Approved without
restrictions
28 08700.001306/2024-83 02/27/2024
Acciona Água and Norte
Saneamento
Fast-track
Approved without
restrictions
29 08700.003394/2024-58 05/17/2024
Canada Pension Plan
Investment Board and
Iguá Saneamento
Fast-track
Approved without
restrictions
30 08700.005228/2024-96 07/23/2024
Equatorial Energia and
Sabesp
Fast-track
Approved without
restrictions
Source: Cade. Prepared by the authors.