Latham Advises on Financing for Stonepeak’s Acquisition of Castrol From BP

Latham & Watkins has advised the arrangers and underwriters on the financing for Stonepeak's acquisition of Castrol, the leading independent global player in finished lubricants, from BP.

The committed financing comprised a US$3.75 billion debt package and dollar- and euro-denominated senior secured notes in an aggregate amount equivalent to US$1 billion, together with dollar- and euro-denominated term loans in an aggregate amount equivalent to US$2.75 billion, each incurred at a holding company level. In addition, the financing includes a revolving credit facility in an amount equivalent to US$1.3 billion to be entered into at the operating group level. US$300 million of the revolving credit facility is designated to finance a mandatory tender offer of Castrol’s India business, which is publicly listed in India. 

The senior secured notes have been issued into escrow and the term loans have been syndicated, in each case subject to completion of the acquisition, which is expected to occur by year-end. The revolving credit facility will be entered into on completion of the acquisition. 

The enterprise value of Castrol at completion is expected to be US$10.1 billion. On completion, BP is expected to retain a 35% minority interest, with Stonepeak holding the majority stake. The Canada Pension Plan Investment Board is expected to become an indirect shareholder through an agreement with Stonepeak valued at approximately US$1.05 billion. 

The Latham team was led by partners Keith Halverstam, Alfred Xue, Jennifer Engelhardt, Matthew Schneider, Joydeep Choudhuri, Kelly Egers, Danielle Brown, Stelios Saffos, Dan Seale, Senet Bischoff, Jesse Sheff, Conray Tseng, Josh Holt, Nicole Fanjul, Victor Ludwig, John Lister, Hai Pham, and Tracy Liu, and counsel Gemma Mootoo Rajah, with associates Oscar Lopez, Simba Gonondo, Carlos Ibarguengoitia, Kristin Tesi, Valera Bamgbala,  Amish Magdani, Sophia Premji, Abdullah Khan, Ivan Alaev, Isabella Pazaryna, and Jade Lee, with assistance from Connor Adams, Molly Mitchell, April Yoon, and Dorian Refloc'h. Tax advice was provided by partners Karl Mah and Bora Bozkurt, with associates Lina Le Roux and Sam Yang.