BP Divests Majority Stake in Castrol Lubricants Business

Strategic Reset Drives $6 Billion Transaction

BP, the UK-based energy giant, has entered into a definitive agreement to sell its 65% majority stake in Castrol, its lubricants business, to Stonepeak, a leading global private investment firm, in a deal valued at $6 billion. This transaction results in a total valuation of Castrol at approximately $10.1 billion.

Business Rationale and Strategic Implications

The divestment is a key component of BP's ongoing strategic reset, which includes a comprehensive portfolio review and a commitment to divest assets worth $20 billion by the end of 2027. This strategic move is designed to focus BP's resources on its core energy businesses while optimizing its investment portfolio.

Market Reaction and Competitive Landscape

The sale process for Castrol attracted significant interest from major industry players and private equity firms, including Reliance Industries, Saudi Aramco, Apollo Global Management, and Lone Star Funds. The transaction with Stonepeak was ultimately selected as it aligned with BP's strategic objectives and valuation expectations.

Financial Impact and Future Outlook

The $6 billion proceeds from this transaction will contribute to BP's overall divestment target and support the company's financial restructuring efforts. The deal is expected to complete in the near term subject to regulatory approvals and customary closing conditions.