General Electric said Monday it had agreed to merge its oil-and-gas business with Baker Hughes, affirming its commitment to the industry despite the prolonged oil price slump.

The combined company will be the world’s second-largest oilfield services provider, with $32 billion in revenue and operations in more than 120 countries, and would compete with No. 1 Schlumberger and Halliburton, which tried to buy Baker Hughes until the $35 billion deal collapsed last May.

GE’s energy business makes oilfield equipment such as blowout preventers, pumps and compressors while Baker Hughes specializes in drilling and fracking new wells.

“This transaction creates an industry leader, one that is ideally positioned to grow in any market,” GE Chief Executive Jeff Immelt said in a news release. “Oil and gas customers demand more productive solutions. This can only be achieved through technical innovation and service execution, the hallmarks of GE and Baker Hughes.”

Under the terms of the deal, GE will contribute its energy business and pay Baker shareholders $7.4 billion in the form of a special one-time cash dividend of $17.50 for each share. What GE referred to as the “New” Baker Hughes will be 62.5% owned by GE and 37.5% owned by Baker Hughes shareholders.

According to The Wall Street Journal, the deal “would enable GE to benefit from an expected recovery in the industry without having to pay for a full acquisition of Baker Hughes.”

Crude prices, which plunged to $30 a barrel this year from more than $100 in 2014, have rebounded to around $50 recently, U.S. rig and well counts ticked up in the third quarter, and GE said last week it believed the oil market had bottomed.

Immelt told investors Monday that the deal is predicated on a forecast for oil prices to rise to $60 per barrel by 2019. “This is a very compelling time for the deal,” he said, noting he expects $1.6 billion in annual cost savings by 2020.

Baker Hughes CEO Martin Craighead said the deal was particularly appealing because of GE’s digital capability, which includes data analytics software that is designed to optimize production.

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