NEW YORK (TheStreet) -- General Electric (GE) - Get Report is merging its oil and gas company with Baker Hughes (BHI) to create a new business that can combine the strengths of both companies, GE Oil & Gas CEO Lorenzo Simonelli said on BloombergTV's "Bloomberg Markets: European Close" on Monday afternoon. The deal is valued at $32 billion. 

This past May, Baker Hughes's $34.6 billion merger with Halliburton (HAL) failed as a result of regulator resistance. 

Soon after the deal fell through, General Electric approached Baker Hughes, Simonelli said. "It actually started soon after we heard that the Halliburton/Baker Hughes transaction failed. And I gave [Baker Hughes CEO] Martin a call and discussed opportuntiies of collaboration around big data."

General Electric wants to take its Predix software platform, which is defined as an "operating system for the Industrial Internet" on the service's website, to the oil field, Simonelli noted. "So discussions started out on how we could really move upstream with the big data analytics of Predix. From there we started to get an understanding of really the complimentary portfolio between the two companies and also what we could provide to our customers from what we view as a full-stream capabiltiy." 

"Did anyone else try and get you in the meantime," BloombergTV's Alix Steel asked Baker Hughes CEO Martin Craighead. 

"I'm not going to comment on that, but I was very intrigued when Lorenzo reached out to me. And I can tell you the conversation quickly grew in terms of the scope of what the possibility was. So we land here today. It's been a pretty rapid journey," Craighead answered. 

Shares of Baker Hughes were slumping by 6.29% to $55.40 in mid-afternoon trading on Monday, while shares of GE were higher. 

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