(Reuters) - General Electric Co (GE.N) said on Monday it would merge its oil and gas business with Baker Hughes Inc BHI.N, creating the world’s second-largest oilfield services provider as competition heats up to supply more-efficient products and services to the energy industry after several years of low crude prices. The new company will vault Baker Hughes’s market share ahead of rival Halliburton, which tried and failed to buy Baker until the deal collapsed last May, and also compete heavily with Schlumberger, the world’s largest oilfield service provider, for customers. GE will argue to antitrust enforcers – who stopped the deal between Halliburton and Baker Hughes just months ago – that their deal is complementary, and that they are committed to any remedy needed to win deal approval, the source said. It was not at the top of the market in this industry before, but with this combination with Baker Hughes it will be.”

The thinking goes that by working together, the two companies will be able to compete with Schlumberger, and Halliburton, the two largest oilfield service companies in the United States, Reuters notes. “This is a good deal for all of the investors,” said Lorenzo Simonelli, head of GE’s oil and gas business who will lead the new entity, to be called “Baker Hughes, a GE company.”

GE is already the world’s largest oilfield equipment maker, supplying blowout preventers, pumps and compressors used in exploration and production.
General Electric says it plans to merge its oil and gas business with the large oilfield services provider Baker Hughes. This follows the demise of a merger plan between Baker Hughes and Halliburton.