Wedoany.com Report-Dec.25, Canada Pension Plan Investment Board (CPPIB) and U.S. private equity firm Stonepeak announced on Wednesday that they will launch an open offer to acquire up to 26% stake in Castrol India Limited.

The offer price is set at 194.04 rupees per share, representing a 2.5% premium to the stock's closing price on Wednesday.

This mandatory open offer follows India's takeover regulations, which require that when an acquirer gains 25% or more in a listed company, it must extend an offer to purchase at least an additional 26% from public shareholders.

The move comes after BP agreed to sell a 65% stake in its global Castrol lubricants business to Stonepeak for approximately $6 billion. The overall transaction values Castrol at an enterprise value of about $10.1 billion.

CPPIB will invest up to $1.05 billion as part of the deal, securing an indirect stake in Castrol.

Through this structure, Stonepeak will gain control over Castrol's entire 51% stake in Castrol India, the publicly listed Indian subsidiary.

The open offer is being managed in compliance with Securities and Exchange Board of India guidelines and is expected to proceed upon completion of the main Castrol transaction.

Castrol India shares showed positive movement on Wednesday, closing higher ahead of the announcement, reflecting market interest in the development.

The transaction highlights strategic investment in the lubricants sector, where Castrol maintains a strong global presence through its branded products for automotive, industrial, and other applications.

Stonepeak, focused on infrastructure and real assets, sees the acquisition as an opportunity to support long-term growth for the business, building on Castrol's established market position and innovation track record.

BP will retain a 35% interest in the restructured Castrol entity as part of a new joint venture with Stonepeak, with an option to sell that stake after a two-year period.

This deal aligns with BP's broader portfolio adjustments and supports continued operations in key markets, including India.

The open offer provides an avenue for public shareholders in Castrol India to participate, potentially leading to changes in the ownership structure while maintaining the company's focus on lubricant solutions.

Overall, the arrangement underscores active interest from international investors in established brands within the energy and industrial products space, fostering potential for further development in regional markets.