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Castrol India Soars as BP Divests Majority Stake
24 Dec
Summary
- BP will sell a 65% stake in Castrol Limited to Stonepeak.
- The deal values Castrol at an enterprise value of $10.1 billion.
- The transaction is expected to conclude by the end of 2026.
BP has announced the sale of a 65% stake in its parent company, Castrol Limited, to Stonepeak for an enterprise value of $10.1 billion. This significant divestment is part of BP's broader strategy to simplify its portfolio and bolster its financial health. The deal is projected to be completed by the close of 2026, subject to necessary regulatory clearances.
Following the announcement, shares of Castrol India experienced a notable increase, climbing 9% to reach Rs 202.40. BP expects to receive approximately $6 billion in net proceeds from the sale. The transaction includes an initial payment and a portion related to future dividends on BP's retained 35% stake, demonstrating a continued interest in Castrol's future performance.
This strategic move marks a key milestone in BP's commitment to accelerating its reset strategy and strengthening its balance sheet. A new joint venture will be established with Stonepeak holding a 65% ownership and BP retaining 35%, ensuring BP benefits from Castrol's growth trajectory, which has shown nine consecutive quarters of year-on-year earnings increases.
