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Deal Overview On October 21, 2025, activist investor Ananym Capital Management publicly disclosed a significant stake in Baker Hughes Company (NASDAQ: BKR, $47.04, Market Capitalization: $46.4 billion) and issued a call for the company’s board and management to formally evaluate a tax-free spin-off of its Oilfield Services & Equipment (OFSE) business. According to Ananym, the strategic separation is the most effective way to remove valuation discount the company is commanding. The firm projects that such a transaction could unlock substantial shareholder value, potentially increasing the stock price by more than 60.0%. Following the announcement, Baker Hughes’ stock price reacted positively to the news, signaling initial market support for the proposal. The proposed separation would create two distinct, publicly-traded entities, each with a focused strategy and a clear investment thesis. The RemainCo would be comprised of the current Industrial & Energy Technology (IET) segment. IET would emerge as a pure-play, high-growth technology leader, strategically positioned to capitalize on the global energy transition. Its portfolio includes critical equipment and services for Liquefied Natural Gas (LNG), power generation, and new energy frontiers such as hydrogen, carbon capture, and geothermal energy. The SpinCo would consist of the OFSE business. This company would be a global leader in providing the essential equipment and services for oil & gas exploration and production, representing the legacy Baker Hughes business. Ananym’s proposal arrives at a time when Baker Hughes has been delivering strong operational performance, outperforming its primary oilfield service competitors, SLB and Halliburton. However, the activist firm argues that the company’s conglomerate structure obscures the superior growth and profitability profile of the IET segment, resulting in a sum-of-the-parts discount where the whole is valued at less than its constituent parts. In its public statements, Baker Hughes’ management has responded constructively, acknowledging it values the opinions of all shareholders and will continue to engage with Ananym Capital. This dialogue follows a prior announcement by the company that it was undertaking a comprehensive review of its capital allocation, operations, and business structure to enhance shareholder value, suggesting that management may be receptive to transformative strategic actions. While no formal decision has been made, Ananym’s proposal has placed a compelling strategic option on the table for the company’s consideration. MORE FOR YOU Deal Rationale The proposal put forth by Ananym Capital for Baker Hughes to separate its OFSE business stems from the argument that Baker Hughes, in its current form, operates as a conglomerate of two fundamentally different businesses. This structure creates a valuation discount, masks the true growth potential of the IET segment, and prevents both businesses from optimizing their capital allocation and strategic focus. A separation would resolve these structural inefficiencies, creating two pure-play leaders, each poised to command optimal valuation from a more natural and dedicated investor base. According to Ananym the valuation gap stems from the market’s difficulty in assessing and applying an appropriate multiple to a company with two distinct divisions possessing divergent growth profiles, risk exposures, capital requirements, and end market drivers. According to Ananym, while Baker Hughes currently trades at an EV/EBITDA of 9.0x on FY26 EBITDA, a more appropriate valuation reflecting its high growth IET business would be closer to 13.0x. Each business segment appeal to entirely different investor cohorts. The IET segment, with its strong ties to secular growth trends in LNG and the energy transition, is a natural fit for growth-oriented investors seeking premium multiples for predictable, high-margin revenue. The segment has superior growth trajectory than the OFSE segment with IET segment growing in excess of 20% in FY24 compared to just 2.0% growth in OFSE. IET’s order backlog too surged 44% YoY to $32.1 billion underpinning its long-term, and high-quality revenue stream, which is fundamentally mispriced within the current blended valuation. As a standalone entity, a pure-play IET would be freed from the competing capital needs of the OFSE business, enabling aggressive reinvestment and allowing it to use a premium-valued stock as a potent currency for strategic acquisitions. On other hand, the OFSE segment is a cyclical business tied to upstream capex, appealing to value and cyclical investors focused on free cash flow (FCF) generation and capital returns. It comes with production-weighted business model, which is less volatile and more resilient than exploration focused peers. The segment has 75% international footprint. Despite that its order book increased just by 7.0% YoY in 3Q25 to $4.1 billion highlighting structurally divergent growth profile than IET segment. As a standalone company, OFSE could sharpen its focus on cost optimization and FCF generation, tailoring a capital return policy to attract a dedicated base of value and income-oriented investors seeking pure-play, diversified exposure to the energy production cycle. The proposed spin-off also aligns with an ongoing trend in the industrial sector on value unlocking. The recent, highly successful spin-off of GE Vernova provides a compelling example for successful break up of Baker Hughes. Since its April 2024 separation, GE Vernova’s market cap has surged over 400%, proving that focused energy transition pure-play, freed from a conglomerate structure would be attractively valued. This validates Ananym’s call for breaking up Baker Hughes allowing it to achieve significant value unlocking. Company Description Baker Hughes Company (Parent) Baker Hughes Company is a global energy technology company, incorporated in 1987 and headquartered in Houston, Texas. A major provider to the energy and industrial sectors, the company operates through two primary business segments: Oilfield Services & Equipment and Industrial & Energy Technology. The OFSE segment offers a broad portfolio for drilling, evaluation, completions, and production, while the IET segment provides equipment and services for mechanical drive, power generation, and climate technologies like carbon capture. With a global workforce of approximately 57,000 employees, Baker Hughes delivers integrated solutions across the energy value chain.
