BP sells majority of Castrol to Stonepeak, secures roughly $6 billion

BP said on Wednesday it has agreed to sell 65 percent of its Castrol lubricants unit to Stonepeak for approximately $6 billion, creating a joint venture in which BP will retain a 35 percent stake. The buyer, described by BP as a leading alternative investment firm with about 80 billion dollars of assets under management, will take majority control while BP keeps a material minority interest and the option to sell its remaining stake after a two year lock up period.

The deal values Castrol at about 10 to 10.1 billion dollars on an enterprise value basis and implies an EV divided by last twelve months EBITDA multiple near 8.6 times. Analysts working on the transaction have adjusted for minority interests and debt like obligations to derive a lower implied equity level closer to 8 billion dollars. BP said the roughly 6 billion dollars in net proceeds reflect accelerated dividend payments and will be fully used to reduce net debt.

Company executives framed the sale as a milestone in a larger corporate reset aimed at simplifying BP's portfolio and strengthening its balance sheet. Carol Howle, interim chief executive at BP, said the transaction "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." Management has targeted about 20 billion dollars of divestments under the broader program, and this transaction is expected to meaningfully advance that objective.

BP said the sale process began earlier in 2025, with bids from multiple private capital groups, and that the deal is expected to close by the end of 2026 subject to customary regulatory approvals. The structure will place Castrol inside a new joint venture majority owned by Stonepeak, with BP remaining a long term partner if it retains its 35 percent equity position beyond the lock up period.

Market reaction to the announcement was muted. BP shares rose by more than one percent immediately following the news before settling to trade fractionally lower later in the morning. The deal comes against a backdrop of executive change at BP, where a new chief executive appointment was announced last week, a shift that market commentators linked to the company’s refreshed strategic priorities.

For private investors and industrial buyers, the transaction highlights persistent appetite for mature energy related cash flows and established brands that generate predictable downstream earnings. For BP, the sale reduces exposure to a non core business while freeing capital to pay down debt and potentially redeploy into core integrated downstream operations or other strategic priorities. Regulators will now review the proposed combination and a final closing timetable will depend on approvals across key jurisdictions.