REG - BP PLC - bp agrees to sell 65% in Castrol to Stonepeak

BPAnnouncement

24/12/2025 07:00

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RNS Number : 8065M  BP PLC  24 December 2025

press release

24 December 2025

 

bp agrees to sell a 65% shareholding in Castrol to Stonepeak at an

enterprise value of $10 billion

 

·    bp has reached an agreement to sell a 65% shareholding in Castrol at
an enterprise value of $10 billion.

·    Total net proceeds to bp of c.$6 billion, including accelerated
dividend payments, will be fully utilised to reduce net debt.

·    Transaction accelerates delivery of bp's reset strategy, will
significantly strengthen its balance sheet, and advances strategy to focus the
downstream.

·    bp's retained stake in a new joint venture provides exposure to
Castrol's growth plan while retaining optionality to realise further value in
the future.

 

Following a comprehensive strategic review of Castrol, bp has reached an
agreement to sell a 65% shareholding in Castrol to Stonepeak, at an enterprise
value of $10.1 billion. This represents an implied EV / LTM EBITDA of around
8.6x reflecting the strength of the business and future growth potential. The
transaction represents a significant milestone in bp's commitment to
accelerate its strategy, including simplifying the portfolio, strengthening
the balance sheet, and focusing the downstream on its leading integrated
businesses.

 

The transaction is expected to result in total net proceeds to bp of
approximately $6.0 billion, which includes around $0.8 billion for the
pre-payment of future dividend income over the short to medium term on bp's
retained 35% stake and other adjustments. The implied total equity value of
Castrol is $8.0 billion after deducting JV minority interests totaling $1.8
billion, and other debt-like obligations of around $0.3 billion, and subject
to customary adjustments. A significant proportion of Castrol JV minority
interests relate to the shareholding in the publicly listed Castrol India
Limited.

 

Upon completion of the transaction a new joint venture will be incorporated
comprising a 65% Stonepeak and 35% bp ownership. bp's retained stake provides
exposure to Castrol's growth plan over the coming years, which builds on a
strong track record of nine quarters of consecutive year on year earnings
growth. Following a two-year lock-up period, bp has optionality to sell its
35% stake in Castrol.

 

The transaction is expected to complete by end of 2026, subject to regulatory
approvals.

 

Carol Howle, interim CEO at bp, said: "Today's announcement is a very good
outcome for all stakeholders. 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 realise value for
our shareholders, generating significant proceeds while continuing to benefit
from Castrol's strong growth momentum. And with this, we have now completed or
announced over half of our targeted $20bn divestment programme, with proceeds
to significantly strengthen bp's balance sheet. The sale 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. And we are doing so with increasing
intensity - with a continued focus on growing cash flow and returns, and
delivering value for our shareholders."

 

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. Castrol's 126-year heritage has created a
leading market position, an iconic brand, and a portfolio of differentiated
products that deliver meaningful value to its customers. We are excited to
work alongside Castrol's talented employees, coupled with bp's continued
guidance as a minority interest holder, as we support the business's continued
growth."

 

The sale is part of bp's previously announced $20 billion divestment programme
and brings completed and announced divestment proceeds to date to around $11.0
billion. All proceeds from this transaction will be allocated to reducing net
debt towards bp's target of $14-18 billion by end 2027. As of the end of 3Q
2025 bp's net debt was $26.1 billion. Divestment proceeds guidance for 2025 is
over $4 billion, of which $1.7 billion has been received as at 3Q25 results,
with the remainder expected to be received by year-end 2025.

 

bp remains committed to driving the highest value for its shareholders, and
will continue to:

·    seek opportunities to high-grade its portfolio and reduce complexity;

·    strengthen its balance sheet and optimise its cost base; and

·    invest with discipline with a focus on maximising cash flow and
returns.

In doing so, bp is accelerating its strategy to become a simpler, leaner, and
more profitable company.

 

Notes to editors

·    The transaction includes minority interests in Castrol, principally
in India (49% interest), Vietnam (35%), Saudi Arabia (50%), Thailand (40%) and
other jurisdictions.

·    After the transaction closes, bp expects to treat its retained stake
in Castrol as an equity accounted investment, and does not expect to recognize
earnings or receive a dividend in the short to medium term. Stonepeak has a
preference on distributions.

·    Castrol non-controlling interests share of net income averaged around
$100 million per annum since 2019.

·    Since 2023 Castrol's annual underlying effective tax rate has been on
average around 30%.

·    bp will appoint two Board seats to the new incorporated joint venture
on closing.

 

Ends

 

Further information:

bp press office London | bppress@bp.com (mailto:bppress@bp.com) | +44
7787685821

 

About bp

For more information visit bp.com.‎

 

About Stonepeak

Stonepeak is a leading alternative investment firm specializing in
infrastructure and real assets with approximately $80 billion of assets under
management. Through its investment in defensive, hard-asset businesses
globally, Stonepeak aims to create value for its investors and portfolio
companies, with a focus on downside protection and strong risk-adjusted
returns. Stonepeak, as sponsor of private equity and credit investment
vehicles, provides capital, operational support, and committed partnership to
grow investments in its target sectors, which include digital infrastructure,
energy and energy transition, transport and logistics, and real estate.
Stonepeak is headquartered in New York with offices in Houston, Washington,
D.C., London, Hong Kong, Seoul, Singapore, Sydney, Tokyo, Abu Dhabi, and
Riyadh. For more information, please visit www.stonepeak.com.

 

Cautionary statement:

In order to utilize the 'safe harbor' provisions of the United States Private
Securities Litigation Reform Act of 1995 (the 'PSLRA') and the general
doctrine of cautionary statements, bp is providing the following cautionary
statement.  This press release document contains certain forecasts,
projections and forward-looking statements - that is, statements related to
future, not past events and circumstances - with respect to the financial
condition, results of operations and businesses of bp and certain of the plans
and objectives of bp with respect to these items. These statements are
generally, but not always, identified by the use of words such as 'will',
'expects', 'is expected to', 'targets', 'aims', 'should', 'may', 'objective',
'is likely to', 'intends', 'believes', 'anticipates', 'plans', 'we see' or
similar expressions. In particular, the following, among other statements, are
all forward-looking in nature: expectations in relation to the completion of
the transaction described including the outcome of regulatory approvals and
timing; expectations in relation to total net proceeds; plans and expectations
in relation to Castrol's future growth plan and bp's retained stake; and plans
and expectations in relation to bp's strategy including bp's net debt and
other primary targets. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that will or may occur in the future and are outside the control of bp. Actual
results or outcomes, may differ materially from those expressed in such
statements, depending on a variety of factors, including the risk factors
discussed under "Risk factors" in bp's most recent Annual Report and Form 20-F
as filed with the US Securities and Exchange Commission and in any of our more
recent public reports.

 

Our most recent Annual Report and Form 20-F and other period filings are
available on our website at www.bp.com, or can be obtained from the SEC by
calling 1-800-SEC-0330 or on its website at www.sec.gov.

 

 

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