BP to Sell Majority Stake in Castrol Business for $6 Billion

Core Viewpoint - BP Plc has agreed to sell a majority stake in its Castrol lubricants division to Stonepeak Partners, aiming to reduce debt and reset its business strategy [1][2]. Group 1: Sale Details - The sale involves a 65% interest in Castrol, raising approximately $6 billion, which includes prepayment of future dividends on BP's remaining stake [2][6]. - The total valuation of Castrol is set at $10.1 billion, including debt, but the implied total equity value is approximately $8 billion after accounting for minority interests [7]. Group 2: Strategic Context - This divestment is part of BP's broader strategy to reduce debt, which stood at over $26 billion at the end of Q3 [6]. - The sale follows a turbulent year for BP, marked by pressure from activist shareholder Elliott Investment Management, leading to a strategic overhaul that refocused the company on its core business and away from renewables [2][4]. Group 3: Market Reaction and Future Outlook - BP's shares rose by as much as 1.4% following the announcement of the deal, although they traded little changed later [3]. - The proceeds from the Castrol sale contribute to BP's asset-sale program, which has now reached about $11 billion, falling short of the $20 billion target set for the end of 2027 [3].