BP to Sell 65% Stake in Castrol to Stonepeak for $10 Billion Enterprise Value | News and Insights

Following a comprehensive strategic review of Castrol, bp has made a significant move by reaching an agreement to sell a 65% shareholding in Castrol to Stonepeak, valued at an enterprise value of $10.1 billion. This deal implies an EV/LTM EBITDA of around 8.6x, showcasing the robustness of the business and its growth potential. This transaction marks a pivotal moment in bp’s broader strategy to streamline its portfolio while reinforcing its commitment to essential integrated businesses in the downstream sector.

The anticipated financial impact of this sale is noteworthy, with expected total net proceeds to bp of approximately $6.0 billion. This figure includes around $0.8 billion as a pre-payment for future dividend income from bp’s remaining 35% stake in Castrol, along with other adjustments. After considering minority interests and debt-like obligations, the implied total equity value of Castrol stands at about $8.0 billion. A substantial portion of minority interests is tied to the publicly listed Castrol India Limited, underscoring the brand’s international significance.

With the completion of this transaction, a joint venture will be established, comprising 65% ownership by Stonepeak and 35% by bp. Retaining this stake provides bp with continued exposure to Castrol’s evolving growth strategy. Over the past nine quarters, Castrol has consistently demonstrated impressive year-on-year earnings growth, further affirming its market strength. Notably, bp will have the option to sell its 35% stake after a two-year lock-up period, creating opportunities for future financial maneuverability.

Carol Howle, bp’s interim CEO, celebrated this milestone, emphasizing its favorable outcome for all involved stakeholders. The comprehensive review of Castrol garnered extensive interest, ultimately leading to the successful majority interest sale to Stonepeak. Howle articulated that this transaction is integral to bp’s divestment program, which aims for $20 billion in divestitures, with the current sale marking over half of that target reached. The proceeds are expected to significantly bolster bp’s balance sheet, aligning with its vision of reducing complexity and focusing on leading integrated downstream businesses.

Anthony Borreca, Senior Managing Director and Co-Head of Energy at Stonepeak, highlighted the critical role lubricants play in various industries, underscoring Castrol’s storied 126-year heritage. Borreca expressed enthusiasm about partnering with Castrol’s skilled workforce and continuing bp’s guidance. This collaboration is anticipated to further support Castrol’s sustained growth trajectory, as the brand holds a prestigious market position and offers differentiated products.

The sale comes as bp continues its commitment to reducing its net debt, aiming for a target range of $14-18 billion by the end of 2027. By the end of Q3 2025, bp’s net debt stood at $26.1 billion. So far, through divestments, bp has generated around $11.0 billion, with guidance for 2025 indicating over $4 billion in divestment proceeds is achievable. The current sale to Stonepeak reflects a strategic shift, with bp focusing on enhancing its portfolio quality and simplifying operations.

Moving forward, bp reiterates its commitment to maximizing shareholder value through intentional strategies. These include seeking opportunities to refine its portfolio and minimize complexities in operations, strengthening its balance sheet, and maintaining disciplined investments aimed at optimizing cash flow and returns. Through these efforts, bp is striving to transform into a simpler, more profitable entity, aligning with its long-term vision for sustainable growth and shareholder satisfaction.