Baker Hughes Company
Energy Technology and Oilfield ServicesFounded 1987- Updated July 2025
Reviewed by Swet Parvadiya
Last reviewed: July 2025
CorpDigest
Baker Hughes Company
Company History
Founded 1987 in Houston, Texas, United States
Last reviewed: 2025-07-15 · By Swet Parvadiya
Baker Hughes's most important data-backed fact is that it generated $27.8 billion in revenue for FY2024 while expanding adjusted EBITDA margins for the fourth consecutive year to 16.5%, producing record free cash flow of $2.3 billion and returning $1.3 billion to shareholders through dividends and buybacks. The company holds $33.1 billion in remaining performance obligations, with $30.1 billion in IET providing multi-year revenue visibility through long-term service agreements that span 10-25 years—a backlog structure that no pure-play oilfield services competitor can replicate. The IET segment grew revenue 20.3% to $12.2 billion, driven by LNG equipment orders for Venture Global, Woodside, and Saudi Aramco, while OFSE revenue grew only 1.7% to $15.6 billion as North American rig count declines offset international growth. CEO Lorenzo Simonelli has committed to 20% EBITDA margins for OFSE in 2025 and IET in 2026, which would add approximately $1.9 billion in annual EBITDA. The strategic challenge is sustaining LNG order momentum in a market where project FIDs are vulnerable to regulatory and financing delays, while defending OFSE market share against SLB and Halliburton in a cyclically weak North American market.
Reuben Carlton 'Carl' Baker Sr. (July 18, 1872 – September 29, 1957) was an American oil industry pioneer who founded Baker Oil Tools. Born in Illinois, he arrived in Los Angeles in 1895 and worked his way from horse team driver to drilling contractor. In 1907, he patented the Baker Well Casing Shoe, a device that revolutionized cable tool drilling by ensuring uninterrupted oil flow through wells. He organized the Baker Casing Shoe Company in Coalinga, California, the same year, and expanded into manufacturing by 1918. His company became Baker Oil Tools in 1928 and Baker International in 1976. Baker obtained more than 150 U.S. patents in his lifetime, including the cement retainer (1912) and float shoe (1923), despite having only a third-grade education. He died at age 85, having built the foundation of what would become one of the world's largest energy technology companies.
Howard Robard Hughes Sr. (1869–1924) was an American inventor and businessman who founded Hughes Tool Company. Born in Missouri, he studied mining engineering and worked in the oilfields of Texas before partnering with Walter B. Sharp to develop the first commercially successful two-cone roller drill bit in 1909. The invention, patented the same year, enabled rotary drilling through hard rock formations and became the industry standard. After Sharp's death in 1912, Hughes acquired full control and renamed the company Hughes Tool Company in 1915. The company generated the fortune that funded his son Howard Hughes Jr.'s aviation, film, and real estate ventures. Hughes Sr. died in 1924, leaving a drill bit empire that would merge with Baker International 63 years later to form Baker Hughes.
On July 16, 1907, Reuben C. Baker was awarded U.S. Patent No. 860,115 for the Well Casing Shoe. On August 14, 1907, he organized the Baker Casing Shoe Company in Coalinga, California, with a machine shop and royalty-based licensing model generating $600-1,500 per month.
Howard R. Hughes Sr. and Walter B. Sharp founded Sharp-Hughes Tool Company in Houston, Texas, after successfully testing the first two-cone roller cutter drill bit. The invention, patented in 1909, enabled rotary drilling through hard rock and became the industry standard for three decades.
Following Walter B. Sharp's death in 1912, Howard R. Hughes Sr. acquired his partner's stake and renamed the company Hughes Tool Company in 1915. The company dominated the global drill bit market and generated the fortune that funded Howard Hughes Jr.'s aviation and film empire.
The Baker Casing Shoe Company was renamed Baker Oil Tools, Inc., reflecting its expansion beyond casing shoes into a full range of well completion and production equipment. By this time, the company had manufacturing operations in Los Angeles and Houston.
Baker Oil Tools completed its initial public offering, becoming a publicly traded company. The IPO provided capital for international expansion and product line diversification, establishing the foundation for the modern Baker Hughes global footprint.
Hughes Tool Company completed its initial public offering, 57 years after its founding. The company had grown to $1.1 billion in revenue by 1987, dominating the global drill bit market with proprietary two-cone and tricone roller bit technologies.
On April 5, 1987, Baker International and Hughes Tool Company merged to form Baker Hughes Incorporated, creating the world's third-largest oilfield services company with $3.5 billion in combined revenue and 25,000 employees. Max L. Lukens became chairman and CEO.
Baker Hughes acquired Eastman Christensen, a leader in directional drilling equipment and measurement-while-drilling (MWD) technology. The acquisition added critical horizontal and directional drilling capabilities that became essential for shale development.
On August 10, 1998, Baker Hughes completed the acquisition of Western Atlas for $5.5 billion in stock plus $700 million in assumed debt. The deal added seismic data acquisition, wireline logging, and reservoir characterization, creating the Baker Atlas division and making Baker Hughes the third-largest oilfield services company globally.
Baker Hughes and Schlumberger combined their geophysical operations to form WesternGeco, a seismic joint venture. Baker Hughes contributed Western Atlas's Western Geophysical division, while Schlumberger contributed Geco-Prakla. The venture was initially owned 70% by Schlumberger and 30% by Baker Hughes.
Schlumberger acquired Baker Hughes's 30% stake in WesternGeco for $2.4 billion, ending the seismic joint venture. The sale provided Baker Hughes with capital for debt reduction and share repurchases but eliminated its seismic data acquisition capabilities.
On November 17, 2014, Halliburton announced a $35 billion acquisition of Baker Hughes that would have created an OFSE giant rivaling SLB. The deal faced immediate antitrust scrutiny from the U.S. Department of Justice and international regulators.
On April 6, 2016, the U.S. Department of Justice blocked the Halliburton-Baker Hughes merger on antitrust grounds, arguing the combination would reduce competition in 23 product markets. Baker Hughes paid Halliburton a $3.5 billion breakup fee and operated as a weakened standalone company.
On July 3, 2017, Baker Hughes merged with GE Oil and Gas in a $7.4 billion deal, creating Baker Hughes, a GE company (BHGE). GE held 62.5% of shares. The merger added gas turbines, compressors, pumps, valves, and LNG systems to Baker Hughes's portfolio. Lorenzo Simonelli became CEO.
GE sold $2.7 billion in Baker Hughes shares in 2019, reducing its stake below 50%. The company rebranded as Baker Hughes Company (BKR) and adopted a new green logo signaling energy transition ambitions. GE's divestiture restored Baker Hughes's operational independence.
General Electric completed its full divestiture from Baker Hughes by selling its remaining 37% stake for approximately $5.5 billion. Baker Hughes became a fully independent public company for the first time since the 2017 GE merger, with no single shareholder holding more than 10%.
For fiscal year 2024, Baker Hughes generated $27.8 billion in revenue, $4.6 billion in adjusted EBITDA (16.5% margin), and $2.3 billion in free cash flow. The company booked $28.2 billion in orders, including $13.0 billion in IET orders, and held $33.1 billion in remaining performance obligations.
Baker Hughes acquired Western Atlas for $5.5 billion in stock to add seismic data acquisition, wireline logging, and reservoir characterization capabilities. Western Atlas was formed in 1987 from Western Geophysical (Litton Industries) and Dresser Atlas (Dresser Industries). The acquisition made Baker Hughes the third-largest oilfield services company globally.
Baker Hughes merged with GE Oil and Gas in a $7.4 billion deal to create a combined energy technology company. GE contributed gas turbines, compressors, pumps, valves, LNG systems, and industrial equipment. Baker Hughes contributed oilfield services expertise and market access.
Baker Hughes acquired Eastman Christensen, a leader in directional drilling equipment and measurement-while-drilling (MWD) technology, to add horizontal and directional drilling capabilities essential for emerging shale development.