BP on Wednesday announced that it has agreed to sell a 65 per cent stake in its lubricants business Castrol to global investment firm Stonepeak for around $6 billion.
The transaction values Castrol at about $10.1 billion, including debt. After the deal, BP will continue to hold a minority stake in Castrol through a joint venture structure.
Following the announcement, shares of Castrol India surged about 8 per cent in early trade and were quoted at around Rs 201 per share.
BP said the entire proceeds from the transaction will be used to reduce its net debt, in line with the company’s target of bringing debt down to $14–18 billion by the end of 2027.
As of the end of the third quarter of 2025, BP’s net debt stood at $26.1 billion. The deal also covers BP’s minority interests in Castrol businesses across several countries.
These include India, where Castrol has a 49 per cent minority interest, Vietnam with 35 per cent, Saudi Arabia with 50 per cent, Thailand with 40 per cent, and stakes in other markets.
BP will have the right to appoint two board members to the newly formed joint venture once the transaction is completed.
Stonepeak said that Canada’s pension fund CPPIB will invest up to $1.05 billion as part of the deal.
Exchange data shows that Castrol held a 51 per cent stake in Castrol India at the end of September.
This sale forms a major part of BP’s broader plan to divest $20 billion worth of assets by the end of 2027.
The company has been selling assets to address years of underperformance, which had drawn criticism from activist investor Elliott Investment Management.
In a statement, BP said the implied total equity value of Castrol is about $8 billion after adjusting for joint venture minority interests of $1.8 billion and other debt-like obligations of around $0.3 billion.
Carol Howle, interim CEO of BP, said the transaction is a positive outcome for all stakeholders.
“The transaction allows us to realise value for our shareholders, generating significant proceeds while continuing to benefit from Castrol’s strong growth momentum,” Howle added.
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.”
(With inputs from IANS)
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