Following a comprehensive strategic review of Castrol, bp has reached an agreement to sell a 65% shareholding in Castrol to Stonepeak, at an enterprise value of $10.1 billion. This represents an implied EV / LTM EBITDA of around 8.6x reflecting the strength of the business and future growth potential.
The transaction represents a significant milestone in bp’s commitment to accelerate its strategy, including simplifying the portfolio, strengthening the balance sheet, and focusing the downstream on its leading integrated businesses. The transaction is expected to result in total net proceeds to bp of approximately $6.0 billion, which includes around $0.8 billion for the pre-payment of future dividend income over the short to medium term on bp’s retained 35% stake and other adjustments.
The implied total equity value of Castrol is $8.0 billion after deducting JV minority interests totaling $1.8 billion, and other debt-like obligations of around $0.3 billion, and subject to customary adjustments. A significant proportion of Castrol JV minority interests relate to the shareholding in the publicly listed Castrol India Limited
