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BP Unloads Castrol Stake in $10 Billion Deal to Cut Debt

MarketDash Editorial Team
1 day ago
BP is selling a 65% stake in its Castrol lubricants business to infrastructure investor Stonepeak for $10.1 billion, with $6 billion in net proceeds earmarked for debt reduction as part of the energy giant's portfolio reset.

BP PLC (BP) is cleaning house, and this time it's the lubricants business getting the exit treatment. The energy giant announced it's selling a 65% controlling stake in Castrol to infrastructure investor Stonepeak, valuing the storied brand at roughly $10.1 billion. For BP, it's all about slimming down, cutting debt, and getting back to basics.

The transaction will put about $6 billion in net proceeds into BP's pocket, including an advance tied to dividend income from the 35% stake it's keeping. Every dollar is headed straight toward debt reduction. BP has been pretty explicit about this: simplify the portfolio, shore up the balance sheet, and focus on assets that throw off reliable cash.

This sale didn't come out of nowhere. It follows a strategic review of Castrol and represents a major step in BP's broader $20 billion divestment program. By offloading majority control but keeping a minority stake, BP gets to reduce operational complexity while still participating in Castrol's ongoing performance. And that performance hasn't been shabby: Castrol has posted nine consecutive quarters of year-over-year earnings gains.

The deal is expected to close by the end of 2026, pending the usual regulatory approvals. Once finalized, Castrol will operate as a joint venture with Stonepeak holding 65% and BP retaining 35%. BP will be locked into that stake for two years, after which it can decide whether to stick around or exit further.

What the Executives Are Saying

BP interim CEO Carol Howle characterized the Castrol transaction as "a very good outcome for all stakeholders," noting that selling to Stonepeak crystallizes shareholder value, advances more than half of BP's $20 billion divestment plan, and strengthens the balance sheet as the company sharpens its reset strategy.

Stonepeak's Anthony Borreca emphasized that lubricants are "mission-critical" across vehicles and industry. He highlighted Castrol's long heritage, strong brand, and differentiated products as positioning the business well for continued growth, with Stonepeak partnering alongside BP as a minority holder.

BP Price Action: BP shares were up 0.35% at $34.70 during premarket trading on Wednesday.

Back to Stock Market News

BP Unloads Castrol Stake in $10 Billion Deal to Cut Debt

MarketDash Editorial Team
1 day ago
BP is selling a 65% stake in its Castrol lubricants business to infrastructure investor Stonepeak for $10.1 billion, with $6 billion in net proceeds earmarked for debt reduction as part of the energy giant's portfolio reset.

BP PLC (BP) is cleaning house, and this time it's the lubricants business getting the exit treatment. The energy giant announced it's selling a 65% controlling stake in Castrol to infrastructure investor Stonepeak, valuing the storied brand at roughly $10.1 billion. For BP, it's all about slimming down, cutting debt, and getting back to basics.

The transaction will put about $6 billion in net proceeds into BP's pocket, including an advance tied to dividend income from the 35% stake it's keeping. Every dollar is headed straight toward debt reduction. BP has been pretty explicit about this: simplify the portfolio, shore up the balance sheet, and focus on assets that throw off reliable cash.

This sale didn't come out of nowhere. It follows a strategic review of Castrol and represents a major step in BP's broader $20 billion divestment program. By offloading majority control but keeping a minority stake, BP gets to reduce operational complexity while still participating in Castrol's ongoing performance. And that performance hasn't been shabby: Castrol has posted nine consecutive quarters of year-over-year earnings gains.

The deal is expected to close by the end of 2026, pending the usual regulatory approvals. Once finalized, Castrol will operate as a joint venture with Stonepeak holding 65% and BP retaining 35%. BP will be locked into that stake for two years, after which it can decide whether to stick around or exit further.

What the Executives Are Saying

BP interim CEO Carol Howle characterized the Castrol transaction as "a very good outcome for all stakeholders," noting that selling to Stonepeak crystallizes shareholder value, advances more than half of BP's $20 billion divestment plan, and strengthens the balance sheet as the company sharpens its reset strategy.

Stonepeak's Anthony Borreca emphasized that lubricants are "mission-critical" across vehicles and industry. He highlighted Castrol's long heritage, strong brand, and differentiated products as positioning the business well for continued growth, with Stonepeak partnering alongside BP as a minority holder.

BP Price Action: BP shares were up 0.35% at $34.70 during premarket trading on Wednesday.