BP has reached an agreement to sell a 65% shareholding in Castrol to Stonepeak for an enterprise value of $10.1 billion. The transaction is expected to generate net proceeds of approximately $6.0 billion for BP. BP will retain a 35% stake in a new joint venture and the deal is projected to close by the end of 2026, subject to regulatory approvals.
Deal Overview
BP has agreed 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 Castrol business. The sale is part of BP’s strategy to simplify its portfolio and focus on its leading integrated businesses. The agreement was announced on December 24, 2025.
Financial Implications
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. The implied total equity value of Castrol is $8.0 billion after deducting JV minority interests totaling $1.8 billion, and other debt-like obligations. BP intends to utilize these proceeds to reduce net debt.
Future Structure and BP’s Role
Upon completion, a new joint venture will be formed, comprising a 65% Stonepeak and 35% BP ownership. BP’s retained stake provides continued exposure to Castrol’s growth potential. After a two-year lock-up period, BP has the option to sell its remaining 35% stake in Castrol.
Strategic Rationale
The sale aligns with BP’s reset strategy, aimed at strengthening its balance sheet and focusing on its downstream operations. The transaction is projected to be completed by the end of 2026, pending regulatory approvals. This divestment contributes to BP’s $20 billion divestment program.
Castrol’s Performance
Castrol has demonstrated consecutive year-on-year earnings growth. BP expects to treat its retained stake in Castrol as an equity-accounted investment after the transaction closes.
Minority Interests
The transaction includes minority interests in Castrol, principally in India (49% interest), Vietnam (35%), Saudi Arabia (50%), and Thailand (40%), among others.
Source: BSE
