BP Found A Buyer For Castrol And It’s Not Who You’d Expect

  • Oil giant BP is selling a majority stake in Castrol for $10.1 billion.
  • Company is being bought by American investment firm.
  • Deal is expected to close next year, following regulatory approvals.

Castrol has been around for 126 years and is one of the largest and most recognizable lubricant companies in the world. However, they have a new owner as Britain’s BP has announced plans to sell a 65 percent stake in the company to the American investment firm Stonepeak.

Back in May, several major players were reportedly eyeing BP’s Castrol division, according to sources cited by Bloomberg. Among the names floated were energy giants like Reliance Industries in India and Saudi Aramco, along with private equity firms Apollo Global Management and Lone Star Funds.

More: Castrol TOM’s Racing Toyota Supra Found In Storage And Is Being Restored

In the end, BP chose Stonepeak, a US-based investment firm headquartered in New York City. Stonepeak manages roughly $80 billion in assets and primarily concentrates on infrastructure and real estate investments.

A $10 Billion Bet on Lubricants

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

Stonepeak highlighted Castrol’s broad manufacturing and distribution footprint, noting that it “manufactures and markets engine oils, industrial fluids, and greases through approximately 20 blending plants and more than 100 third-party facilities and warehouses worldwide across 150 countries.”

The transaction is expected to close next year, but is subject to regulatory approvals. If everything goes according to plan, BP will book total net proceeds of approximately $6 (£4.4 / €5.1) billion. This includes a pre-payment of future dividends for their 35 percent stake.

BP Found A Buyer For Castrol And It’s Not Who You’d Expect

Speaking of which, BP is locked in for two years. After that point, the company has the option to sell their remaining interest in Castrol. It remains unclear what they’ll do at that time, but the oil giant said all proceeds from this transaction will be allocated to reducing debt.

Carol Howle, BP’s interim CEO, said in a statement,“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 realize value for our shareholders, generating significant proceeds while continuing to benefit from Castrol’s strong growth momentum.”

Stonepeak’s Co-Head of Energy, Anthony Borreca, was similarly upbeat as he stated “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.”

BP Found A Buyer For Castrol And It’s Not Who You’d Expect

The Auto World

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