BP has announced that it has reached an agreement to sell a 65% shareholding in Castrol to Stonepeak, at an enterprise value of $10.1 billion. This represents an implied EV / LTM EBITDA of around 8.6x, reflecting the strength of the business and future growth potential. The transaction marks a milestone in BP’s strategy to simplify its portfolio, strengthen the balance sheet, and focus downstream operations on leading integrated businesses.
The transaction is expected to result in total net proceeds to BP of approximately $6.0 billion, including around $0.8 billion for the pre-payment of future dividend income on BP’s retained 35% stake and other adjustments. The implied total equity value of Castrol is $8.0 billion after deducting JV minority interests of $1.8 billion and other obligations of around $0.3 billion. A significant portion of these interests relates to Castrol India Limited.
Upon completion, a new joint venture will be formed with 65% Stonepeak and 35% BP ownership. BP’s retained stake maintains exposure to Castrol’s growth plan, supported by nine consecutive quarters of year-on-year earnings growth. After a two-year lock-up period, BP may sell its remaining stake.
“Today’s announcement is a very good outcome for all stakeholders. We concluded a thorough strategic review of Castrol, resulting in the sale of a majority interest to Stonepeak. We have now completed or announced over half of our targeted $20 billion divestment programme, with proceeds strengthening BP’s balance sheet.
The sale marks an important milestone in delivering our reset strategy. We are reducing complexity, focusing downstream operations, and accelerating delivery of our plan while maintaining focus on cash flow, returns, and shareholder value,” said Carol Howle, interim CEO.
Anthony Borreca, Senior Managing Director and Co-Head of Energy at Stonepeak, said: “Lubricants are mission-critical products essential to the safe and efficient functioning of vehicles, machinery, and industrial processes. Castrol’s 126-year heritage has created a leading market position, iconic brand, and differentiated product portfolio. We look forward to supporting its continued growth alongside BP.”
The transaction is expected to complete by end of 2026, subject to regulatory approvals. .