In a significant move within the global energy sector, the Canada Pension Plan Investment Board (CPPIB) has entered a partnership to acquire a major stake in the renowned lubricants company Castrol. The deal, announced on Wednesday, December 24, 2025, sees CPPIB joining forces with the alternative investment firm Stonepeak in a transaction valued at approximately US$10.1 billion.
Deal Structure and Financial Commitment
The investment structure delineates clear roles for each partner. Stonepeak is acquiring a majority controlling interest in Castrol from its current owner, BP PLC. Meanwhile, CPPIB's participation will result in an indirect non-controlling interest in the British oil company. To support this substantial transaction, the Canadian pension fund manager has committed to invest up to US$1.05 billion.
This investment underscores CPPIB's ongoing strategy to deploy capital in essential, global businesses. The transaction is anticipated to finalize by the end of 2026, pending the receipt of necessary regulatory approvals from governing bodies.
Castrol's Global Reach and Future Potential
Castrol is a powerhouse in the lubricants industry, marketing a wide array of industrial and automotive products including engine oils, greases, and specialized fluids. The company boasts an impressive global manufacturing and distribution network, operating approximately 20 blending plants and utilizing over 100 third-party facilities and warehouses. Its products reach customers in roughly 150 countries worldwide.
Bill Rogers, the Head of Sustainable Energies at CPP Investments, highlighted the strategic rationale behind the deal. He pointed out that Castrol is strategically positioned to play a growing role in emerging applications, which range from electric vehicle components to the cooling systems essential for data centres.
Strategic Alignment for Long-Term Returns
"Our investment alongside Stonepeak aligns with our strategy of backing businesses that are essential to the energy system," Rogers stated. He further expressed confidence in the deal's potential, adding, "We believe Castrol’s strong market position and diversified growth opportunities will deliver attractive risk‑adjusted returns for the CPP Fund."
This acquisition represents a calculated bet on the enduring need for high-performance lubricants and fluids, even as the global energy landscape evolves. By investing in a company with a century-old brand and a vast distribution footprint, CPPIB aims to secure stable, long-term returns for the contributors and beneficiaries of the Canada Pension Plan.
