Companies vying for BP's $8 billion Castrol oil division include the owner of Motor Fuel Group.
In a significant move, British oil and gas giant BP has initiated the auction for its lubricant division, Castrol, valued at approximately $8 billion to $11 billion. The divestiture is part of BP's strategic reset aimed at reducing debt and focusing on core hydrocarbons, driven by pressure from activist investor Elliott Investment Management.
Several firms have entered the bidding process, including private equity giants such as Clayton, Dubilier & Rice (CD&R), Apollo Global Management, and Lone Star Funds. CD&R's bid adds significance due to its connection with BP's chairman, Helge Lund, who is an operating advisor to CD&R, although he is reportedly not participating in the Castrol bid himself.
Strategic buyers, including Reliance Industries of India and Saudi Aramco, are also competing in the auction. Despite the interest, the divestiture is considered a challenging asset to sell due to its size and complexity, and the pool of potential buyers remains narrow.
The auction for Castrol is progressing during a turbulent time for BP, as the company is under pressure to slash costs and boost profitability. Last week, London-listed oil rival Shell denied being in early-stage talks to buy BP, following a report by The Wall Street Journal that was later found to be erroneous.
Notably, both Sam Laidlaw and Ken MacKenzie have withdrawn from the process to replace Helge Lund at BP. A spokesman for CD&R declined to comment about the Castrol auction, while BP has not provided a comment about the Castrol auction or the withdrawal of Sam Laidlaw and Ken MacKenzie.
In summary, the bidding process for Castrol is actively competitive, with several firms vying for the opportunity. The outcome of the auction remains uncertain, but it is clear that this divestiture is a pivotal and high-stakes move for BP as it aligns with its strategic direction and the evolving energy sector landscape.
| Firm | Type | Notes | |-------------------------------|-------------------|------------------------------------------| | Clayton Dubilier & Rice (CD&R) | Private Equity | Entered the bidding; BP chairman linked but not involved in bid | | Apollo Global Management | Private Equity | Active bidder | | Lone Star Funds | Private Equity | Active bidder | | Reliance Industries | Strategic Buyer | Bidding on Castrol | | Saudi Aramco | Strategic Buyer | Bidding on Castrol |
The private equity firms Clayton, Dubilier & Rice (CD&R), Apollo Global Management, and Lone Star Funds are among those actively bidding for Castrol, with CD&R's bid gaining significance due to its connection with BP's chairman, Helge Lund. Strategic buyers, such as Reliance Industries of India and Saudi Aramco, are also competing in the auction, adding to the complexity of the bidding process.
Several firms, both private equity and strategic, are vying to acquire Castrol, underscoring the significant financial and energy implications of this divestiture for BP.
