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Dallas • General Electric is taking advantage of a prolonged energy slump to become a bigger player in the oil and gas drilling business, a bet that could pay off big when prices recover.

GE and Baker Hughes Inc. will combine their oil and gas operations, creating a major player in the oilfield-services industry at a time when the energy sector is bogged down by weak and volatile commodity prices.

The new publicly traded company will still be called Baker Hughes, but GE will own 62.5 percent of it.

On a call with investors, GE CEO Jeff Immelt said the deal was intended to create a more technically sophisticated company that can provide the kinds of advanced services that oil companies will demand.

It will also be better able to weather the slump in oil prices, and "if pricing gets better, it allows us to benefit from that as well," Immelt told CNBC.

The major oil-service companies — Baker Hughes, Schlumberger Ltd. and Halliburton Co. — are among the first to feel the pinch of weak prices, as major oil companies cut capital spending and renegotiate contracts with suppliers.

After severe declines in the price of oil and gas during the recession, prices appeared to recover and stabilize as production charged forward. But oil prices began to slide again in mid-2014, creating new headwinds and thousands of layoffs at Baker Hughes and its rivals.

If Monday's deal is completed and further consolidates the services business, it could boost pricing power for all the major companies. But there is no guarantee that the transaction will succeed.

Halliburton attempted to buy Houston-based Baker Hughes but abandoned the $35 billion bid this year after U.S. antitrust regulators opposed it and suggested they would demand large divestitures.

Most analysts, however, say Baker Hughes and GE's oil and gas operations have little overlapping business, making big divestitures less likely.

With the combined company, "you get technical oil and gas expertise from Baker and also that manufacturing prowess from GE, which hopefully get costs down quite a bit and offer some pretty good solutions" for oil companies, Jonathan Garrett, an energy analyst with Wood Mackenzie, said in an interview.

Baker Hughes is the smallest of the three leading international oilfield-services companies, which help oil and gas companies drill and keep wells running.

Schlumberger and Halliburton are likely to continue dominating for basic services such as drilling and hydraulic fracturing, Garrett said. The new Baker Hughes, he said, will stick to its current strategy of touting expertise in drilling pumps, fluids and other niche products.

Baker Hughes has a market capitalization less than a third that of industry leader Schlumberger Ltd. By combining with GE, however, its annual estimated revenue will more than double to $32 billion, much closer to Schlumberger, which has annual revenue of $35.5 billion.

Because the deal is structured as a combination of two companies, it will cost GE far less — a $7.4 billion contribution plus its oil and gas business, with about $13 billion in sales — than an outright acquisition. Yet GE will still be able to capture more of the upside if oil prices rebound.

The deal was unanimously endorsed by directors of both companies but needs the approval of Baker Hughes shareholders and regulators. Baker Hughes shareholders would get a one-time cash dividend of $17.50 per share and own 37.5 percent of the new company, with GE owning the rest. The companies expect to close the deal in mid-2017.

GE said the deal would add about 4 cents per share to its earnings in 2018 and 8 cents per share by 2020.

The new Baker Hughes would have headquarters in Houston and London. Lorenzo Simonelli, president and CEO of GE's oil and gas business, would become CEO, Immelt would be chairman, and current Baker Hughes CEO Martin Craighead would be vice chairman. GE would pick five of the nine directors.

Cowen and Co. analyst Gautam Khanna said the companies fit well together strategically, and "we like the timing of the deal" during the trough of the oil-industry cycle.

Shares of Boston-based General Electric Co. fell 12 cents to close Monday at $29.10. Baker Hughes' stock fell $3.72, or 6.3 percent, to $55.40.