Reliance Industries, Aramco may come head-to-head for BP’s Castrol unit: Report

Oil-to-telecom conglomerate Reliance Industries (RIL) is among the suitors vying for British Petroleum’s (BP) Castrol lubricant business, Bloomberg reported, citing people with knowledge of the matter. Along with Reliance, buyout firms Apollo Global Management and Lone Star Funds are also in the fray.

BP has sent out initial information to other potential suitors mulling bidding, including investment firms Brookfield Asset Management and Stonepeak Partners, the report said, quoting the sources. The business is currently valued between $8 billion and $10 billion, it added.

Reportedly, Saudi Aramco, the world’s biggest energy company, is also among potential bidders—it may bid for all or some parts of the Castrol business. According to the report, the talks are currently in their preliminary phases, with initial bids expected in the coming weeks. The price and outcome could change, and some of the suitors could also team up in the bidding process, it added.

The report also said that bankers are considering providing a debt equivalent of $4 billion to back potential bids for some businesses of Castrol. The business includes lubricants for automotives and for industrial use, along with liquid cooling technology for artificial intelligence data centres. The report valued the listed Castrol business in India at $2.5 billion. Reliance and Aramco are eyeing Castrol’s operations in fast-growing markets like India, the report said, citing the sources.

Reliance Industries has a fuels and mobility-focused joint venture with BP, known as Jio-bp, and works in providing high-quality differentiated fuels, lubricants, retail, and advanced low-carbon mobility solutions. In addition to marketing conventional fuels, Reliance BP Mobility Limited provides advanced mobility solutions and alternative fueling options, such as Electric Vehicle (EV) charging points, to its customers.

For the quarter ended March 31, Castrol India’s revenue from operations rose to ₹1,422 crore from ₹1,377 crore in the corresponding period last year. However, during the same period, the net profit dropped to ₹233.5 crore from ₹271.4 crore in the year-ago period. For the year ended December 31, the board declared a final dividend of ₹9.5 per share.

BP has started a strategic review of its Castrol business. In response to clarification sought by the exchanges, Castrol India said that the strategic review will consider all options with a focus on value creation. “Proceeds from any potential transaction that may arise as a result of the review will be allocated to strengthening BP’s balance sheet,” Castrol India said in an exchange filing.