Baker Hughes, Cactus Create Joint Venture for Surface Pressure Control Services
- Strategic partnership combines complementary portfolios to enhance technological innovation
- Allows Baker Hughes to reallocate capital toward higher-return opportunities
- Maintains strategic presence in surface pressure control through 35% stake
- Expected to enhance earnings durability and cash flow
- Baker Hughes reduces control over its surface pressure control product line
- Potential integration challenges between the two companies' operations
- Transaction completion subject to regulatory approval risks
Insights
Baker Hughes optimizes portfolio by creating JV with Cactus for surface pressure control, retaining 35% while freeing capital for growth.
This strategic joint venture between Baker Hughes and Cactus represents a calculated portfolio refinement in the oilfield services sector. Baker Hughes is contributing its surface pressure control product line to a new entity where Cactus will hold 65% ownership and operational control, while Baker Hughes maintains a 35% stake. This structure allows Baker Hughes to preserve strategic exposure to this business segment while simultaneously freeing up capital for redeployment toward higher-return opportunities.
The transaction cleverly combines complementary capabilities: Baker Hughes brings its established international market presence in wellhead and production tree systems, while Cactus contributes its expertise in unconventional drilling techniques and operational agility. By structuring the joint venture to operate independently from Cactus' existing Pressure Control business, both companies signal their intent to maintain distinct market approaches while pursuing technological innovation.
For Baker Hughes, this move aligns with CEO Lorenzo Simonelli's articulated strategy of enhancing earnings durability and optimizing capital allocation. The joint venture approach rather than complete divestiture indicates Baker Hughes sees continued long-term value in surface pressure control technology while benefiting from Cactus' specialized operational capabilities.
This transaction reflects the broader industry trend where energy service companies are streamlining portfolios to sharpen focus on core competencies while maintaining strategic positioning in adjacent markets. With regulatory approval pending and closing expected in second half of 2025, any financial impact remains prospective rather than immediate, making this primarily a strategic positioning move.
- Cactus to become majority owner and operator of Baker Hughes’ surface pressure control product line, with Baker Hughes retaining
35% stake - Joint venture combines complementary portfolios to lead technological innovation
- Aligns with Baker Hughes’ ongoing strategy to optimize its portfolio
HOUSTON and LONDON, June 02, 2025 (GLOBE NEWSWIRE) -- Baker Hughes (NASDAQ: BKR), an energy technology company, announced Monday an agreement to form a new joint venture with a subsidiary of Cactus, Inc. (NYSE: WHD, “Cactus”), in which Baker Hughes will contribute its surface pressure control (SPC) product line. Cactus, a global manufacturer and service provider of pressure control equipment for oil and gas drilling, completion and production, will assume operational control, owning
The joint venture will operate independently from Cactus’ existing Pressure Control business and will focus on maintaining its leadership position in the international market for surface wellhead and production tree systems.
This targeted portfolio refinement is aligned with Baker Hughes’ focus on enhancing the durability of earnings and cash flow and will enable the company to reallocate capital toward higher-return opportunities, all while maintaining a strategic and disciplined approach to capital deployment.
“This transaction marks an important step in our ongoing portfolio optimization strategy, enabling us to sharpen our focus on core growth areas while continuing to drive higher returns, reinforcing our commitment to long-term value for our shareholders,” said Baker Hughes Chairman and CEO Lorenzo Simonelli. “We remain committed to our valued SPC partners and customers whose operations we have proudly supported, and we believe this joint venture only enhances delivery of innovation and reliability in well control as the combined business will leverage Cactus’ unconventional expertise and agility into international markets.”
The closing of the transaction is subject to customary conditions, including regulatory approvals, and is expected to close in the second half of 2025.
About Baker Hughes
Baker Hughes (NASDAQ: BKR) is an energy technology company that provides solutions to energy and industrial customers worldwide. Built on a century of experience and conducting business in over 120 countries, our innovative technologies and services are taking energy forward – making it safer, cleaner and more efficient for people and the planet. Visit us at bakerhughes.com.
For more information, please contact:
Media Relations
Adrienne M. Lynch
+1 713-906-8407
adrienne.lynch@bakerhughes.com
Investor Relations:
Chase Mulvehill
+1 346-297-2561
investor.relations@bakerhughes.com
FAQ
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