BP has agreed to sell a 65% stake in its Castrol lubricants business to infrastructure investor Stonepeak at an enterprise value of about $10 billion, as the energy major presses ahead with its divestment program and balance sheet repair.
The transaction is expected to generate net proceeds of around $6 billion for BP, including accelerated dividend payments, with all proceeds earmarked for reducing net debt.
Under the deal, BP will retain a 35% stake in Castrol through a newly incorporated joint venture alongside Stonepeak. The retained stake will give BP exposure to Castrol’s future growth, with the option to sell the holding after a two-year lock-up period.
Following completion, Stonepeak will own 65% of the joint venture, with BP holding the remaining 35%. The transaction values Castrol at $10.1 billion on an enterprise basis, implying an EV to last-twelve-months EBITDA multiple of about 8.6 times.
“The transaction allows us to realize 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 $20 billion divestment program, 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,” said Carol Howle, interim CEO at BP.
The implied equity value of Castrol is $8.0 billion after accounting for joint venture minority interests and debt-like obligations. A significant portion of minority interests relates to Castrol India Limited, where BP holds a 49% stake.
“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,” added Anthony Borreca, Senior Managing Director and Co-Head of Energy at Stonepeak.
The transaction is expected to close by the end of 2026, subject to regulatory approvals.
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