Investment firm Stonepeak, New York, announced it has agreed to acquire a majority controlling interest in Castrol Ltd., Pangbourne, England, the global lubricants business, from British energy company BP plc, London, in a transaction that values the business at approximately $10.1 billion on an enterprise basis.
Under the terms of the agreement, Stonepeak will acquire 65% of Castrol, while BP will retain a 35% minority interest in the business through a newly formed joint venture. The deal is expected to close by the end of 2026, subject to customary regulatory approvals.
The transaction is expected to deliver net proceeds of around $6 billion to BP, including accelerated dividend payments, with all proceeds earmarked for reducing the company’s net debt. BP has an option to sell its remaining interest after a two-year lock-up period.
As part of the deal, the Canada Pension Plan Investment Board (CPP Investments), Toronto, will invest up to $1.05 billion in support of the transaction, acquiring an indirect non-controlling stake in Castrol alongside Stonepeak.
Castrol, one of the world’s largest lubricants providers, manufactures, and markets engine oils, industrial fluids, and greases through roughly 20 blending plants and more than 100 third-party facilities across about 150 countries.
Anthony Borreca, senior managing director and co-head of energy at Stonepeak, said, “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.”
“We are thrilled to have Stonepeak join us as a partner in Castrol. Stonepeak’s capital support, energy sector expertise, and experience working with similar companies that provide essential services will be immensely additive in helping the business to innovate and grow,” said Michelle Jou, global CEO of Castrol.
Bill Rogers, managing director, head of sustainable energies at CPP Investments said, “Our investment alongside Stonepeak aligns with our strategy of backing businesses that are essential to the energy system. We believe Castrol’s strong market position and diversified growth opportunities will deliver attractive risk‑adjusted returns for the CPP Fund.”
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.”
Legal and financial advisors on the transaction include Simpson Thacher & Bartlett LLP; DLA Piper, Paul, Weiss, Rifkind, Wharton & Garrison LLP; and UBS Securities India Private Ltd., which also published a mandatory tender offer announcement for Castrol India Ltd. in accordance with Indian takeover regulations.
