GE bets on oil with Baker Hughes deal

General Electric announced today plans to merge its oil and gas business into Baker Hughes, a major player in the oilfield services industry.

The combined businesses of GE Oil and Gas and Baker Hughes have annual revenue of over $30 billion.

The deal is expected to allow the companies to cut costs by $1.6 billion a year within four years.

Under the deal, GE and Baker Hughes will create a new company that GE will control. Baker Hughes shareholders will own a 37.5 percent stake.

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