General Electric and Baker Hughes are joining their oil and gas businesses to create a powerful player in an energy sector buffeted by years of weak prices.
The deal could give the new company, which will be called the "New" Baker Hughes, more leverage both in technology and with oil drillers that are cutting back on contracts with oilfield service companies like Baker Hughes.
Baker Hughes is the smallest of the big three oilfield services companies. It has a market capitalization less than a third of rival Schlumberger Ltd.
Combined with GE, however, its annual estimated revenue will more than double to $32 billion, a lot closer to Schlumberger, which has...