General Electric (GE) has agreed to merge its oil and gas business with Baker Hughes to create the world’s second-largest oilfield services provider with combined revenues of US$32bn (£26bn).

GE will own a 62.5% stake in the new company after contributing US$7.4bn (£14.29) to fund a special dividend of US$17.50 (£14.30) a share to Baker Hughes shareholders.

The transaction, expected to be completed in the middle of 2017, is subject to approval by regulators and Baker Hughes shareholders.

Haliburton came close to an acquisition of Baker Hughes earlier this year, however the move was aborted after failing to win approval from regulators.