BP Sells Majority Stake in Castrol to Stonepeak for $10 Billion, Shares Stable

BP (LON: BP) has reached an agreement to sell a 65% shareholding in its Castrol lubricants business to Stonepeak, valuing Castrol at an enterprise value of $10.1 billion.

The deal is expected to generate net proceeds of approximately $6.0 billion for BP, including around $0.8 billion from the pre-payment of future dividend income.

BP intends to use the funds to reduce its net debt, aligning with its strategic objectives.

The implied EV/LTM EBITDA multiple of around 8.6x reflects Castrol's strong market position and growth potential. The implied total equity value of Castrol is $8.0 billion after accounting for JV minority interests and other debt-like obligations.

BP's net debt stood at $26.1 billion as of Q3 2025. The transaction aims to reduce net debt to between $14-18 billion by the end of 2027.

The sale aligns with BP's broader strategy to simplify its portfolio, strengthen its balance sheet, and focus its downstream operations on integrated businesses. The company has now completed or announced over half of its targeted $20 billion divestment program.

BP will retain a 35% stake in a new joint venture with Stonepeak, allowing it to participate in Castrol's future growth. After a two-year lock-up period, BP will have the option to sell its remaining stake.

Regulatory approvals are required before the deal's expected completion by the end of 2026.

Carol Howle, interim CEO at BP, stated, “Today's announcement is a very good outcome for all stakeholders… The transaction allows us to realise value for our shareholders, generating significant proceeds while continuing to benefit from Castrol's strong growth momentum.”