by British oil giant BP has announced the sale of a controlling stake in its world-renowned lubricants company Castrol. The deal, valued at $10.1 billion USD, transfers a 65% share to the American investment firm Stonepeak.
The Path to the Deal and the New Owner
Castrol, a brand with a 126-year history, is one of the largest and most recognizable in its industry worldwide. Rumors of a possible sale emerged back in May, with potential buyers named including giants like India’s Reliance Industries, Saudi Arabia’s Aramco, as well as private investment funds. However, in the end, BP settled on Stonepeak – a New York-based firm that manages assets worth about $80 billion and specializes in infrastructure and real estate.
By the way: The Castrol TOM’s Racing Toyota Supra was found in storage and is now being restored.
Details of the Billion-Dollar Deal
The $10.1 billion deal also received financial support from the Canada Pension Plan Investment Board, which will invest up to $1.05 billion, thereby gaining an indirect stake in Castrol. Stonepeak particularly noted the scale of the company’s manufacturing and distribution: approximately 20 blending plants and over 100 third-party manufacturing facilities and warehouses worldwide, covering 150 countries.
The deal is expected to be completed next year after obtaining the necessary regulatory approvals. BP is anticipated to receive net proceeds of around $6 billion from the operation, including an advance on future dividends for its remaining stake (35%).
Future Plans and Comments from the Parties
BP has committed to retaining its stake for the next two years, after which it will have an option to sell the remaining shares. The company stated that all proceeds will be directed towards reducing its debt burden.
We conducted a thorough strategic review of Castrol, which generated significant interest and led to the sale of the controlling stake to Stonepeak. This deal allows us to realize value for our shareholders, receiving significant funds, while continuing to benefit from Castrol’s strong growth momentum, – stated BP’s interim CEO Carol Howle.
Castrol’s 126-year legacy has created a leading market position, an iconic brand, and a portfolio of differentiated products that deliver significant value to its customers. We look forward to working together with Castrol’s talented employees, as well as with BP, which will remain a minority shareholder, to support the business’s continued growth, – added Stonepeak’s Energy Co-Head Anthony Borreca.
This deal reflects a significant trend in the energy sector, where traditional giants are beginning to reassess their asset portfolios, focusing on core business areas. The sale of a brand that has been part of the company for decades indicates BP’s strategic desire to optimize its structure and strengthen financial stability. For Stonepeak, this means entering a new, yet related industry, where a strong global brand and established infrastructure can provide a stable revenue stream. The future of Castrol under the guidance of a new strategic investor could bring innovation to the traditional lubricants market, especially in the context of the transition to electric mobility and new industrial technologies.
