Real asset manager Stonepeak is acquiring a controlling interest in BP’s $10.1bn (€8.57bn) Castrol lubricants business, with backing from Canada Pension Plan Investment Board (CPP Investments).
Stonepeak has agreed to acquire a 65% stake in Castrol, with CPP Investments contributing up to $1.05bn in support of the transaction for an indirect stake. BP will retain a 35% interest in the lubricants unit.
The transaction values Castrol at an enterprise value of approximately $10.1bn.
Castrol 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.
BP said the total net proceeds of $6bn, which include accelerated dividend payments, will be used for net debt reduction.
Carol Howle, interim CEO at BP, said: ”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.”
Anthony Borreca, senior MD and co-head of energy at Stonepeak, said: “Lubricants are a mission-critical product, which are essential to the safe and efficient functioning of virtually every vehicle, machine, and industrial process in the world.
“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.”
Bill Rogers, MD, head of sustainable energies at CPP Investments, said: “Castrol is a high‑quality, global business at the heart of the energy and industrial economy. Its cutting-edge innovations and premium brand position it well for a growing role in emerging applications, from electric vehicles to data centres.
“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.”
Michelle Jou, global CEO of Castrol, said: “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.
“This transaction reflects our commitment to investing in the future and creating new opportunities for growth and success at Castrol, and we are proud that Stonepeak shares in our vision for the business as we take the next step in our journey.”
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