Following a recent deal, the Canada Pension Plan Investment Board (CPPIB) and global investment firm Stonepeak are on the verge of acquiring a majority stake in Castrol Group Holdings.
The transaction, which features a CPPIB investment of around $1 billion, will see Castrol owner BP keep a 35 per cent interest. However, the deal will create substantial movement for Castrol Group Holdings’ shares due to its effect on Castrol India’s public shareholders.
For strategic reasons and to optimise its portfolio, BP is divesting the majority stake it has in Castrol Group Holdings. This move will empower the energy titan to zero in on its core downstream and upstream operations, while still retaining a minority interest.
The acquisition of the listed entity by the two investment companies will prompt a compulsory open offer for shareholders of Castrol India. A regulatory requirement insists that new majority owners extend an official offer to buy out any minority shareholders at a set price. Castrol India investors will now examine the terms of the open offer, which will be shaped by market conditions. During the complicated transaction, top India law firm Khaitan & Co will supply legal counsel to both CPPIB and Stonepeak.
A globally respected brand, Castrol Lubricants was founded by Charles “Cheers” Wakefield in 1899. The brand’s product portfolio includes thousands of specialised oils, fluids and greases. These include innovative products such as air compressor oils, lithium-based greases, slideway oils and vacuum pump fluids, to name but a few.
