SABESP announces agreement with the Municipality of Diadema

         SABESP announces agreement with the Municipality of Diadema

PR Newswire

SAO PAULO, Aug. 29, 2013

SAO PAULO, Aug. 29, 2013 /PRNewswire/ -- Pursuant to CVM Instruction 358 of
January 3, 2002,Companhia de Saneamento Basico do Estado de Sao Paulo -
SABESP("Company" - BM&FBovespa: SBSP3; NYSE: SBS),one of the largest water
and sewage service providers in the world based on the number of
customers,hereby announces that it has entered into an agreement with the
Executive Power of the Municipality of Diadema to assume total control over
the municipality's water and sewage services for a period of 30 years.

The main items of the agreement are:

1.Total assumption of the concession, comprising water and sewage services,
    for 30 years.
2.Settlement of the lawsuit in regard to debt arising from the expropriation
    of the assets by the municipal government.
3.Settlement of the lawsuits related to wholesale water supply debt arising
    from the partial payment of water bills by Saned – the municipal company
    that currently provides these services in the municipality.
4.The assumption of Saned's workforce by Sabesp.
5.Compliance with the Municipal Sanitation Plan.

The realisation of the transaction and the signature of the agreement depend
on approval by the municipal legislature.

More details will be available in a conference call to be held shortly.

IR Contacts:

Mario Arruda Sampaio: (55 11) 3388-8664 (maasampaio@sabesp.com.br)
Angela Beatriz Airoldi: (55 11) 3388-8793 (abairoldi@sabesp.com.br)

SOURCE SABESP