Saudi Aramco considering bid for BP’s Castrol: Bloomberg
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The news: Saudi Aramco is weighing making an offer for part or all of BP’s lubricant assets under the Castrol brand, according to sources cited by Bloomberg.
The numbers: Bloomberg has previously reported that the Castrol unit could be worth around USD10 billion ($15.9 billion). Aramco already owns the Valvoline lubricants business, which it bought in 2023 for USD2.65 billion.
The context: On completing its Valvoline purchase in 2023, Aramco said that the acquisition complements Aramco's growing presence in the premium branded lubricants market space, and accelerates its aim to become one of the world's preeminent integrated, branded lubricants players.
Castrol’s operations in fast-growing markets like India are of particular interest to Aramco, according to Bloomberg, and Castrol’s Mumbai subsidiary has a market value of around USD2.5 billion.
BP is currently undergoing a major restructuring which includes a strategic review of its Castrol business, following years of underperformance compared to peers. The sale could help the oil major win back investor confidence.
Earlier this month it emerged that activist hedge fund Elliott Management has become the third-largest shareholder in BP after building out a £3.8 billion stake in the oil major, representing almost 5% of BP’s ownership, with only BlackRock and Vanguard holding larger positions at 9% and 5% respectively. The Castrol business is reportedly among the BP assets that Elliott has earmarked for potential sales.
The source: Bloomberg
