Baker Hughes has completed its merger with the oil and gas business of General Electric to create the second biggest oilfield services group after Schlumberger.

The deal, agreed last October, is aiming to deliver cost savings of $1.2bn a year by 2020 and annual revenue synergies of $400m by the same year.

Baker Hughes will cease trading in its current form when the New York market closes on Monday and resume in its enlarged form on Wednesday.

GE has contributed its existing oil and gas business and a top-up payment of $7.4bn for a 62.5 per cent stake in the combined group, with the remaining 37.5 per cent floated on the New York Stock Exchange.

Existing Baker Hughes shareholders will receive a one-time cash dividend of $17.50 per share to be paid on Wednesday.

The new entity will have combined revenues of about $23bn, with equipment and services capabilities in all parts of the oil and gas industry from upstream exploration and production to downstream refining and petrochemicals.

The group, to be known as “Baker Hughes, a GE company”, is expected to put a strong emphasis on digital technology and big data – harnessing GE’s digital capabilities to increase efficiency and reduce risks from oil drilling to refineries.

The new Baker Hughes will have dual headquarters in London and Houston and be led by Lorenzo Simonelli, current chief executive of GE Oil & Gas.

Mr Simonelli said the enlarged group’s breadth of capabilities – as well as its access to wider GE expertise and financing – would help customers “withstand volatility” in the oil and gas market by “driving productivity while minimising costs and risks”.

The deal adds to a wave of consolidation among oilfield services companies since the crude price crash of 2014 sent revenues into a tailspin. Other deals have included the acquisition of Cameron by Schlumberger and the merger of Technip and FMC Technologies.

The tie up between GE and Baker Hughes followed the collapse of Halliburton’s attempted acquisition of Baker Hughes last year because of anti-trust obstacles.

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