Shares of Castrol India surged nearly 8% in intraday trade on December 24 after UK-based energy major BP announced that it has agreed to sell a 65% stake in its Castrol business to global investment firm Stonepeak for about $6 billion.
Following the announcement, Castrol India stock was trading around ₹201 per share, significantly higher than its previous close.
BP said the entire net proceeds from the transaction will be used to reduce its net debt. The divestment forms a major part of BP’s broader plan to sell $20 billion worth of assets by the end of 2027, as the company works to improve financial performance after years of underperformance that attracted pressure from activist investor Elliott Investment Management.
The sale process for Castrol was initiated in February this year as part of BP’s strategic reset announced by former CEO Murray Auchincloss. The strategy focuses on prioritising oil and gas operations, cutting costs, simplifying the portfolio, and strengthening the balance sheet.
Commenting on the deal, bp’s interim CEO Carol Howle said the transaction represents a strong outcome for all stakeholders. She noted that the strategic review of Castrol attracted significant interest and enabled BP to unlock shareholder value while continuing to benefit from Castrol’s growth momentum. She added that with this deal, BP has completed or announced more than half of its planned $20 billion divestment programme, significantly reinforcing its balance sheet.
The transaction also marks a key milestone in BP’s ongoing reset strategy, with the company aiming to reduce complexity, sharpen its downstream focus, and accelerate cash flow generation and returns for shareholders.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice.
