General Electric said on Monday that it would combine its oil and gas business with Baker Hughes, looking to increase its scale to battle the effects of a prolonged slump in oil prices that has eaten into results and prompted job cuts across the petroleum sector.
The new company, which G.E. referred to as the “new” Baker Hughes, would be one of the world’s largest providers of equipment, technology and services to the oil and gas industry. In 2015, the businesses had $32 billion in revenue, and operations in more than 120 countries. It also would be better able to compete with Schlumberger and other oil services companies.
Oversupply in the oil industry has sapped prices in the past two years, and there is little expectation that prices will rise much more before the end of the year. But expectations that the Organization of the Petroleum Exporting Countries cartel could freeze or cut production has helped send prices higher recently.
The deal came after Baker Hughes and Halliburton called off a $35 billion merger in May, following a lengthy regulatory review and a lawsuit by the Justice Department to block the transaction on antitrust grounds.