Oil giant BP has announced it will sell a majority stake in its lubricant brand Castrol for approximately $10.1 billion. The buyer, the American investment firm Stonepeak, will acquire a 65 percent interest in the 126-year-old company. This significant transaction is expected to close in 2024, pending regulatory approvals.
Castrol, known for its expansive range of engine oils, industrial fluids, and greases, commands a strong presence in the global market. It operates around 20 blending plants and utilizes more than 100 third-party facilities across 150 countries. This sale represents a strategic shift for BP, which has been evaluating its portfolio to focus on core operations.
Back in May, BP considered various potential buyers, including major players such as Reliance Industries of India and Saudi Aramco, along with private equity firms like Apollo Global Management and Lone Star Funds. Ultimately, BP opted for Stonepeak, a New York City-based firm that manages approximately $80 billion in assets, primarily focusing on infrastructure and real estate investments.
The deal is set to generate significant financial benefits for BP. The company anticipates net proceeds of about $6 billion, which includes a pre-payment for future dividends related to BP’s remaining 35 percent stake in Castrol. BP will maintain this interest for a minimum of two years, after which it may choose to divest further.
Carol Howle, BP’s interim CEO, expressed confidence in the sale, stating, “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 realize value for our shareholders, generating significant proceeds while continuing to benefit from Castrol’s strong growth momentum.”
Stonepeak’s Co-Head of Energy, Anthony Borreca, echoed enthusiasm regarding the acquisition, highlighting Castrol’s rich legacy and market position. He emphasized the brand’s ability to deliver meaningful value to customers and expressed eagerness to collaborate with Castrol’s workforce while benefiting from BP’s ongoing involvement as a minority stakeholder.
As the transaction moves forward, all proceeds from the sale will be directed towards reducing BP’s debt, demonstrating the company’s commitment to strengthening its financial position. This strategic decision marks a pivotal moment for Castrol as it embarks on a new chapter under Stonepeak’s ownership, poised for continued growth in the competitive lubricant market.
This development signifies a major shift in the landscape of the lubricant industry, aligning with BP’s broader strategy to streamline its operations and focus on areas of core strength.
