bp has agreed to sell a 65% shareholding in its Castrol lubricants business to infrastructure investor Stonepeak at an enterprise value of $10.1 billion, following a comprehensive strategic review of the asset. The transaction forms part of bp’s broader reset strategy aimed at simplifying its portfolio, strengthening its balance sheet, and sharpening its focus on downstream operations.
The deal is expected to generate approximately $6.0 billion in net proceeds for bp, including around $0.8 billion from accelerated dividend prepayments linked to bp’s retained 35% stake. Proceeds will be fully allocated toward reducing net debt, advancing bp’s target of lowering leverage to between $14 billion and $18 billion by the end of 2027.
Upon completion, Castrol will operate as a newly incorporated joint venture owned 65% by Stonepeak and 35% by bp. bp’s retained minority interest provides continued exposure to Castrol’s growth strategy, which has delivered nine consecutive quarters of year-on-year earnings growth, while preserving optionality to monetise the remaining stake following a two-year lock-up period.
The implied equity value of Castrol is approximately $8.0 billion after accounting for joint venture minority interests and debt-like obligations, with a significant portion of minority ownership linked to the publicly listed Castrol India business. The transaction values Castrol at an implied EV-to-LTM EBITDA multiple of around 8.6x, reflecting the strength of the brand, its global footprint, and long-term growth prospects.
Completion of the transaction is expected by the end of 2026, subject to customary regulatory approvals. The divestment contributes to bp’s previously announced $20 billion asset sale programme and brings total completed and announced divestments to roughly $11 billion to date.
Source: bp
