NEW YORK (TheStreet) -- General Electric (GE) - Get Report made a smart move by combining its oil and gas operations with Baker Hughes (BHI) to create a new, publicly traded company, TheStreet's Jim Cramer said on CNBC's "Halftime Report" on Monday afternoon.
"This is [General Electric CEO] Jeff Immelt's, I think, finest deal. This is terrific," he said.
The deal was made as the industry struggles with lower oil prices and could be the "defining beginning of what I think may be the next move back for GE," Cramer added.
When rumors about the deal came on Friday, Cramer panicked, he said. "I said, 'Oh just when I think that oil could be stabilizing here.' Instead it was the exact opposite. They got this unbelievable position where they now have a call on the upside."
In addition, the new company will be the "first bonafide competitor to Schlumberger (SLB)," Cramer claimed. With all of the technology advantages the combined company will have, it will be able to lower the cost for drilling. "I applaud it. I like it," he concluded.
Shares of Baker Hughes were slumping by 7.24% to $54.84 in late afternoon trading on Monday, while shares of General Electric were trading higher.
(GE is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of Cramer's holdings witha free trial.)
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings team rates General Electric as a Buy with a ratings score of B-. This is driven by multiple strengths, which the team believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers.
You can view the full analysis from the report here: GE