Global energy major bp has entered into a definitive agreement to sell a 65% shareholding in Castrol to global investment firm Stonepeak, valuing the lubricants business at an enterprise value of approximately $10 billion. The transaction marks a significant step in bp’s ongoing portfolio reset and balance sheet strengthening strategy.
The deal implies an EV-to-LTM EBITDA multiple of around 8.6x, reflecting Castrol’s strong operating performance and long-term growth prospects. bp is expected to receive net proceeds of about $6 billion, including nearly $0.8 billion from accelerated dividend payments linked to bp’s retained 35% stake. All proceeds will be used to reduce net debt.
A key element of the transaction is Castrol India Limited, which represents a substantial portion of Castrol’s minority interests. Castrol India, a publicly listed entity, accounts for a significant share of Castrol’s earnings and market presence in one of the world’s fastest-growing lubricants markets. Minority interests across Castrol’s global operations total around $1.8 billion, with India being the largest contributor.
Following completion, a new joint venture will be formed with Stonepeak holding 65% and bp retaining 35%. While bp will relinquish majority control, its retained stake ensures continued exposure to Castrol’s growth, including its strong performance record of nine consecutive quarters of year-on-year earnings growth. bp will have the option to exit its remaining stake after a two-year lock-up period.
The implied equity value of Castrol is approximately $8 billion, after accounting for minority interests and debt-like obligations. The transaction is expected to close by the end of 2026, subject to regulatory approvals across multiple jurisdictions, including India.
Commenting on the development, Carol Howle, interim CEO of bp, said the transaction delivers strong value for shareholders while allowing bp to sharpen its focus on its leading downstream businesses. She noted that the sale takes bp past the halfway mark of its $20 billion divestment programme, with completed and announced divestments now totaling around $11 billion.
Anthony Borreca, Senior Managing Director and Co-Head of Energy at Stonepeak, highlighted Castrol’s global brand strength and 126-year heritage, describing lubricants as a mission-critical product across automotive and industrial applications. He added that Stonepeak looks forward to working alongside Castrol’s management team, with bp continuing as a strategic minority partner.
bp said proceeds from the transaction will support its target of reducing net debt to $14–18 billion by end-2027, down from $26.1 billion as of Q3 2025. As part of the agreement, bp’s retained stake will be treated as an equity-accounted investment, and Stonepeak will hold preference on distributions in the near to medium term.
The transaction underscores Castrol India’s strategic importance within bp’s global lubricants portfolio and highlights India’s role as a core growth market in Castrol’s long-term strategy.