bp to Sell Majority Stake in Castrol to Stonepeak for $10.1bn
Posted: Wed Dec 24, 2025 9:11 am
bp has agreed to sell a 65% stake in Castrol to global investment firm Stonepeak, following a comprehensive strategic review of the lubricants business. The transaction values Castrol at an enterprise value of $10.1 billion, implying an EV/LTM EBITDA multiple of approximately 8.6x, reflecting the strength of the brand and its future growth prospects.
The deal marks a key milestone in bp’s strategy to simplify its portfolio, strengthen its balance sheet and sharpen its focus on its leading integrated downstream businesses.
bp expects to receive net proceeds of around $6.0 billion from the transaction. This includes approximately $0.8 billion related to the pre-payment of future dividend income over the short to medium term on bp’s retained 35% stake, alongside other customary adjustments.
The implied total equity value of Castrol is $8.0 billion, after accounting for joint venture minority interests of $1.8 billion and other debt-like obligations of approximately $0.3 billion. A significant portion of the minority interests relates to Castrol India Limited, which is publicly listed.
Upon completion, a new joint venture will be established with Stonepeak holding a 65% interest and bp retaining 35%. bp’s continuing stake provides exposure to Castrol’s growth strategy, which builds on a strong operational performance, including nine consecutive quarters of year-on-year earnings growth.
Following a two-year lock-up period, bp will have the option to sell its remaining 35% stake in Castrol.
The deal marks a key milestone in bp’s strategy to simplify its portfolio, strengthen its balance sheet and sharpen its focus on its leading integrated downstream businesses.
bp expects to receive net proceeds of around $6.0 billion from the transaction. This includes approximately $0.8 billion related to the pre-payment of future dividend income over the short to medium term on bp’s retained 35% stake, alongside other customary adjustments.
The implied total equity value of Castrol is $8.0 billion, after accounting for joint venture minority interests of $1.8 billion and other debt-like obligations of approximately $0.3 billion. A significant portion of the minority interests relates to Castrol India Limited, which is publicly listed.
Upon completion, a new joint venture will be established with Stonepeak holding a 65% interest and bp retaining 35%. bp’s continuing stake provides exposure to Castrol’s growth strategy, which builds on a strong operational performance, including nine consecutive quarters of year-on-year earnings growth.
Following a two-year lock-up period, bp will have the option to sell its remaining 35% stake in Castrol.
Carol Howle, interim CEO at bp, said: “Today’s announcement is a very good outcome for all stakeholders. We concluded a thorough strategic review of Castrol, that generated extensive interest and resulted in the sale of a majority interest to Stonepeak. The transaction allows us to realise value for our shareholders, generating significant proceeds while continuing to benefit from Castrol’s strong growth momentum. And with this, we have now completed or announced over half of our targeted $20bn divestment programme, with proceeds to significantly strengthen bp’s balance sheet. The sale marks an important milestone in the ongoing delivery of our reset strategy. We are reducing complexity, focusing the downstream on our leading integrated businesses, and accelerating delivery of our plan. And we are doing so with increasing intensity – with a continued focus on growing cash flow and returns, and delivering value for our shareholders.”
The sale is part of bp’s previously announced $20 billion divestment programme and brings completed and announced divestment proceeds to date to around $11.0 billion. All proceeds from this transaction will be allocated to reducing net debt towards bp’s target of $14-18 billion by end 2027. As of the end of 3Q 2025 bp’s net debt was $26.1 billion. Divestment proceeds guidance for 2025 is over $4 billion, of which $1.7 billion has been received as at 3Q25 results, with the remainder expected to be received by year-end 2025.Anthony Borreca, Senior Managing Director and Co-Head of Energy at Stonepeak, said: “Lubricants are a mission-critical product, which are essential to the safe and efficient functioning of virtually every vehicle, machine, and industrial process in the world. Castrol’s 126-year heritage has created a leading market position, an iconic brand, and a portfolio of differentiated products that deliver meaningful value to its customers. We are excited to work alongside Castrol’s talented employees, coupled with bp’s continued guidance as a minority interest holder, as we support the business’s continued growth.”