BP Sells 65% Castrol Stake to Stonepeak for $10 Billion

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BP Sells 65% Castrol Stake to Stonepeak for $10 Billion

BP has announced the sale of a 65% stake in its Castrol brand to Stonepeak for approximately $10.1 billion. This strategic move comes after an extensive review of Castrol and aims to streamline BP’s portfolio while enhancing its financial standing.

Transaction Details

Transaction Value: $10.1 billion enterprise value
Implied EV/EBITDA: 8.6x
Expected Net Proceeds: Approximately $6.0 billion
Castrol’s Equity Value: Estimated at $8.0 billion after accounting for minority interests and debt-like obligations

Implications for BP and Shareholders

The sale allows BP to generate significant funds, intended to strengthen its balance sheet. After adjustments, BP will retain 35% ownership in Castrol, benefiting from its ongoing growth potential. Castrol has demonstrated robust performance with nine consecutive quarters of year-over-year earnings growth.

Future Plans

Completion of the transaction is anticipated by the end of 2026, contingent upon regulatory approvals. Following a two-year lock-up period, BP retains the option to sell its remaining stake in Castrol.

Executives’ Statements

Carol Howle, interim CEO of BP, highlighted the importance of this sale in achieving the company’s broader $20 billion divestment program. “This transaction reflects our ongoing strategy of simplifying our portfolio and focusing on integrated businesses,” Howle stated.

Anthony Borreca, Senior Managing Director at Stonepeak, emphasized Castrol’s significance in the lubricants market, noting its extensive heritage and brand presence. He expressed enthusiasm for collaborating with Castrol’s workforce to drive further growth.

Financial Strategy

Revenue generated from this divestment will contribute towards BP’s goal of reducing its net debt, targeting a range of $14 billion to $18 billion by the end of 2027. Currently, BP’s net debt sits at $26.1 billion as of the third quarter of 2025.

BP is firmly committed to enhancing shareholder value through strategic portfolio management and disciplined investment. The company remains focused on improving cash flow and delivering sustainable returns amidst a shifting economic landscape.