bp has agreed to sell a 65% stake in Castrol to Stonepeak at a $10.1 billion valuation. The deal marks a major milestone in bp’s strategy to simplify its portfolio and strengthen its balance sheet, while giving Castrol new momentum for independent growth.
Following a comprehensive strategic review, bp has agreed to sell a 65% stake in Castrol to Stonepeak at an enterprise value of $10.1 billion. The valuation, which implies an EV/LTM EBITDA multiple of around 8.6x, highlights the strength of Castrol’s business and its future growth potential. This transaction marks a significant milestone in bp’s ongoing strategy to simplify its portfolio, strengthen its balance sheet, and sharpen its downstream focus on leading integrated businesses.
The deal is expected to deliver net proceeds of approximately $6.0 billion to bp, including $0.8 billion related to the pre-payment of future dividends on bp’s retained 35% stake. Castrol’s implied equity value stands at $8.0 billion after accounting for minority interests and debt-like obligations. A substantial portion of these minority interests relates to Castrol India Limited, a publicly listed entity. Upon completion, a new joint venture will be formed with 65% ownership by Stonepeak and 35% by bp. bp’s retained stake ensures continued exposure to Castrol’s growth trajectory, which has already demonstrated nine consecutive quarters of year-on-year earnings growth. After a two-year lock-up period, bp will retain the option to divest its remaining interest.
Carol Howle, interim CEO of bp, described the agreement as “a very good outcome for all stakeholders,” noting that the strategic review attracted strong interest and resulted in the sale of a majority interest to Stonepeak. She emphasized that the transaction strengthens bp’s balance sheet and represents an important milestone in delivering its reset strategy, reducing complexity, and accelerating plans to grow cash flow and returns.
Anthony Borreca, Senior Managing Director and Co-Head of Energy at Stonepeak, highlighted the critical role lubricants play in global industry, praising Castrol’s 126-year heritage, iconic brand, and differentiated product portfolio. He expressed enthusiasm about working with Castrol’s employees and bp as a minority shareholder to support the company’s continued growth.
The sale forms part of bp’s previously announced $20 billion divestment program, bringing completed and announced proceeds to around $11 billion to date. All proceeds will be directed toward reducing net debt, which stood at $26.1 billion at the end of Q3 2025, with a target of $14–18 billion by 2027. bp remains committed to maximizing shareholder value by streamlining its portfolio, strengthening its financial position, and investing with discipline to enhance cash flow and returns.
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