bp has agreed to sell a 65% shareholding in Castrol to investment firm Stonepeak in a deal that values the lubricants business at an enterprise value of $10.1 billion. The company said the valuation implies an EV/LTM EBITDA multiple of about 8.6x and follows a strategic review that attracted broad interest.
bp expects total net proceeds of approximately $6.0 billion. That figure includes around $0.8 billion related to the pre-payment of future dividend income over the short to medium term on bp’s retained 35% stake, along with other customary adjustments. bp said the implied total equity value of Castrol is $8.0 billion after deducting $1.8 billion of JV minority interests and roughly $0.3 billion of other debt-like obligations, subject to adjustments. A significant portion of the JV minority interests is tied to Castrol’s shareholding in the publicly listed Castrol India Limited.
Following completion, bp and Stonepeak will form a new joint venture in which Stonepeak will hold 65% and bp will retain 35%. bp said its continuing stake provides exposure to Castrol’s growth plan, which it noted builds on nine consecutive quarters of year-on-year earnings growth. After a two-year lock-up period, bp will have the option to sell its remaining 35% interest.
The transaction is expected to close by the end of 2026, subject to regulatory approvals.
bp positioned the sale as part of its previously announced $20 billion divestment program and said completed and announced divestments to date total around $11.0 billion. The company said proceeds from the Castrol transaction will be directed to reducing net debt toward its target range of $14–$18 billion by the end of 2027. As of the end of the third quarter of 2025, bp reported net debt of $26.1 billion. bp also reiterated its 2025 divestment proceeds guidance of more than $4 billion, noting that $1.7 billion had been received as of its 3Q25 results, with the remainder expected by year-end 2025.
KEY QUOTES:
“Today’s announcement is a very good outcome for all stakeholders. We concluded a thorough strategic review of Castrol, that generated extensive interest and resulted in the sale of a majority interest to Stonepeak. The transaction allows us to realise value for our shareholders, generating significant proceeds while continuing to benefit from Castrol’s strong growth momentum… The sale marks an important milestone in the ongoing delivery of our reset strategy.”
Carol Howle, Interim CEO, bp
“Lubricants are a mission-critical product… Castrol’s 126-year heritage has created a leading market position, an iconic brand, and a portfolio of differentiated products… We are excited to work alongside Castrol’s talented employees, coupled with bp’s continued guidance as a minority interest holder, as we support the business’s continued growth.”
Anthony Borreca, Senior Managing Director and Co-Head of Energy, Stonepeak
