BP Sells Majority Stake in Castrol to Stonepeak in $10 Billion Deal

December 24, 2025

BP has agreed to divest a majority stake in its Castrol lubricants business to Stonepeak at a $10 billion enterprise value, generating roughly $6 billion in proceeds to accelerate debt reduction and streamline its downstream portfolio.

BP reached the deal following a strategic review of Castrol, concluding in a sale that values the business at an implied 8.6x EV/LTM EBITDA and establishes a new joint venture in which Stonepeak will hold 65%, and BP will retain 35%. The transaction marks one of BP’s largest divestments to date and represents a major step toward its $20 billion disposal target.

The sale will provide BP with approximately $6 billion in net proceeds, including $800 million in accelerated dividend pre-payments linked to BP’s retained 35% stake. The company plans to apply the entire amount toward reducing net debt, which stood at $26.1 billion at the end of Q3 2025. The transaction also simplifies BP’s downstream operations and advances its reset strategy of focusing capital on integrated businesses with higher returns.

The divestment comes as BP moves to tighten its balance sheet, optimize its portfolio, and improve cash generation. The company has now completed or announced more than half of its $20 billion divestment program, with cumulative proceeds at approximately $11 billion. Castrol—founded 126 years ago—remains one of the world’s most recognized lubricant brands, with material market positions across automotive, industrial, and marine sectors. The new joint venture structure allows BP to retain exposure to Castrol’s growth trajectory while opening a path to fully exit after a two-year lock-up.

Stonepeak emphasized lubricants’ critical role across global industries and signaled plans to support Castrol’s expansion alongside bp’s minority participation. Castrol posted nine consecutive quarters of year-over-year earnings growth, and BP highlighted momentum across its international subsidiaries, including sizeable minority positions in Castrol India, Vietnam, Saudi Arabia, and Thailand.

Regulatory approvals are expected to be completed by the end of 2026. After closing, BP will account for its retained stake under the equity method and does not expect to receive dividends in the near term due to Stonepeak’s distribution preference.

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