BP Has Discovered a Buyer for Castrol, and It’s Not Who You Might Think | Carscoops

      A significant share of Castrol is being transferred as BP reconfigures its involvement, signaling a new chapter for the 126-year-old lubricant brand's international prospects.

      Oil mogul BP is divesting a majority stake in Castrol for $10.1 billion, with the company being acquired by a U.S. investment firm. The agreement is anticipated to finalize next year, pending regulatory approvals.

      Having been established for 126 years, Castrol stands as one of the largest and most well-known lubricant manufacturers globally. BP has announced plans to offload a 65 percent interest in the company to American investment firm Stonepeak.

      In May, various significant entities were reportedly considering BP's Castrol division, as per sources from Bloomberg. Names mentioned included energy powerhouses like India’s Reliance Industries and Saudi Aramco, alongside private equity firms such as Apollo Global Management and Lone Star Funds.

      Ultimately, BP opted for Stonepeak, a New York City-based investment firm that manages approximately $80 billion in assets and focuses primarily on infrastructure and real estate investments.

      The deal is valued at approximately $10.1 billion (£7.5 billion / €8.6 billion), with the Canada Pension Plan Investment Board backing the deal with up to $1.05 billion (£778 million / €892 million), providing them an "indirect stake in Castrol."

      Stonepeak emphasized Castrol's extensive manufacturing and distribution network, remarking that it “produces and sells engine oils, industrial fluids, and greases through roughly 20 blending plants and over 100 third-party facilities and warehouses across 150 countries.”

      The transaction is expected to conclude next year, contingent on regulatory approvals. Assuming everything proceeds smoothly, BP will realize total net proceeds of around $6 billion (£4.4 billion / €5.1 billion), which includes a pre-payment of future dividends for their retained 35 percent stake.

      Moreover, BP is committed for two years. After this period, the company may consider selling its remaining stake in Castrol. It is uncertain what their decision will be at that time, but BP has stated that all proceeds from this divestment will be directed toward debt reduction.

      Carol Howle, BP’s interim CEO, commented, “We conducted a comprehensive strategic review of Castrol, generating significant interest and resulting in the majority stake sale to Stonepeak. This transaction enables us to unlock value for our shareholders, providing substantial proceeds while still benefiting from Castrol’s robust growth trajectory.”

      Stonepeak’s Co-Head of Energy, Anthony Borreca, expressed enthusiasm, stating, “Castrol’s 126-year legacy has established a leading market position, an iconic brand, and a range of distinctive products that offer substantial value to its customers. We look forward to collaborating with Castrol’s skilled employees, along with BP's continued guidance as a minority stakeholder, to foster the company’s ongoing growth.”