BP has reached an agreement to transfer 65% of its stake in Castrol to investment firm Stonepeak, valuing the deal at $10 billion in business terms. The decision is part of BP’s $20 billion divestment plan to strengthen its balance sheet and focus its strategy on its downstream business.
Financial strengthening of Stonepeak
The agreement will provide BP with net proceeds of approximately $6 billion, which will be used to reduce net debt, which stood at $26.1 billion at the end of the third quarter of 2025. Such a move strengthens the company’s intention to achieve a target debt range of between $14 billion and $18 billion by 2027.
The transaction establishes a joint venture: The company will have control with 65% of the shares, while BP will retain 35%, maintaining a strategic management presence and two board seats. The structure allows BP to participate in Castrol’s projected growth and retain a future exit option after a two-year lock-up period.
The sale of Castrol closed at an implied EV/EBITDA valuation of 8.6x, highlighting the profitability and growth potential of the brand. The total equity value was estimated at 8 billion, net of minority interests and other liabilities. It is worth mentioning that Castrol India, with a 49% stake, constitutes a relevant part of these assets.
Divestiture shows steady progress towards BP’s repositioning repositioning BP as a company focused on integrated energy assets. By simplifying its portfolio and redirecting its resources, BP seeks to increase profitability, cash flow and accelerate the execution of its corporate strategy.
From Stonepeak, the transaction represents a strong entry into the global lubricants business, considered essential to the efficient operation of vehicles and industries. With a 126-year history, Castrol maintains a leading position in the industry, backed by a strong brand and a portfolio of differentiated products.
Source and photo: bp