By: ICN Bureau
Last updated : December 25, 2025 8:20 pm
The deal is expected to generate approximately $6.0 billion in net proceeds for bp
bp has agreed to sell a 65% stake in Castrol to Stonepeak for an enterprise value of $10.1 billion. This valuation, representing an 8.6x EV/LTM EBITDA multiple, underscores Castrol's growth potential and marks a major step in bp’s strategy to simplify its portfolio and strengthen its balance sheet.
The deal is expected to generate approximately $6.0 billion in net proceeds for bp. This total includes roughly $0.8 billion in pre-paid future dividends for bp’s remaining 35% stake. The transaction values Castrol’s total equity at $8.0 billion, after accounting for $1.8 billion in joint venture minority interests—primarily involving the publicly listed Castrol India Limited—and $0.3 billion in debt-like obligations.
Upon completion of the transaction a new joint venture will be incorporated comprising a 65% Stonepeak and 35% bp ownership. bp's retained stake provides exposure to Castrol’s growth plan over the coming years, which builds on a strong track record of nine quarters of consecutive year on year earnings growth. Following a two-year lock-up period, bp has optionality to sell its 35% stake in Castrol.
The transaction is expected to complete by end of 2026, subject to regulatory approvals.
Carol Howle, interim CEO at bp, said: “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. And with this, we have now completed or announced over half of our targeted $20bn divestment programme, with proceeds to significantly strengthen bp’s balance sheet. The sale marks an important milestone in the ongoing delivery of our reset strategy. We are reducing complexity, focusing the downstream on our leading integrated businesses, and accelerating delivery of our plan. And we are doing so with increasing intensity – with a continued focus on growing cash flow and returns, and delivering value for our shareholders.”
Anthony Borreca, Senior Managing Director and Co-Head of Energy at Stonepeak, said: “Lubricants are a mission-critical product, which are essential to the safe and efficient functioning of virtually every vehicle, machine, and industrial process in the world. Castrol’s 126-year heritage has created a leading market position, an iconic brand, and a portfolio of differentiated products that deliver meaningful value to its customers. 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.”
The sale is part of bp’s previously announced $20 billion divestment programme and brings completed and announced divestment proceeds to date to around $11.0 billion. All proceeds from this transaction will be allocated to reducing net debt towards bp’s target of $14-18 billion by end 2027. As of the end of 3Q 2025 bp’s net debt was $26.1 billion. Divestment proceeds guidance for 2025 is over $4 billion, of which $1.7 billion has been received as at 3Q25 results, with the remainder expected to be received by year-end 2025.