BP Agrees to Sell Majority Stake in Castrol to Stonepeak in $10 Billion Deal

BP announced on Tuesday that it has reached an agreement to sell a majority shareholding in Castrol, its lubricants business, to alternative investment firm Stonepeak at an enterprise value of $10 billion.

Under the terms of the agreement, Stonepeak will acquire a 65% stake in Castrol, while BP retains 35% ownership in a newly formed joint venture. The transaction is expected to generate approximately $6 billion in net proceeds for BP, which will be fully allocated toward reducing the company's net debt.

The deal represents a significant milestone in BP's strategic portfolio restructuring. The implied enterprise value reflects a multiple of around 8.6 times Castrol's last twelve months EBITDA, underscoring the business's strength and growth potential. The total equity value of Castrol stands at $8 billion after accounting for joint venture minority interests of $1.8 billion and other obligations.

Carol Howle, interim CEO at BP, described the announcement as "a very good outcome for all stakeholders," noting that the transaction allows BP to realize value while continuing to benefit from Castrol's growth momentum. The sale brings BP's completed and announced divestment proceeds to approximately $11 billion as part of its previously announced $20 billion divestment program.

Castrol has demonstrated consistent performance with nine consecutive quarters of year-on-year earnings growth. BP's retained 35% stake provides continued exposure to the business's growth trajectory, with an option to sell after a two-year lock-up period.

Anthony Borreca, Senior Managing Director at Stonepeak, emphasized the strategic importance of lubricants as mission-critical products essential to vehicles, machinery, and industrial processes globally. He highlighted Castrol's 126-year heritage and leading market position.

The transaction is expected to complete by the end of 2026, subject to regulatory approvals. BP's net debt stood at $26.1 billion at the end of the third quarter of 2025, with a target of $14-18 billion by the end of 2027.