NEW YORK (TheStreet) -- Shares of Baker Hughers Inc (BHI) are soaring, up 10.25% to $66.03 in afternoon trading Monday, following the company's merger announcement with rival oilfield services company Halliburton (HAL) in a cash and stock deal worth $34.6 billion.
The combined company, which manages oil and gas fields for energy companies, will be able to reduce costs by $2 billion a year, the Associated Press reports.
On the completion of the transaction, Baker Hughes stockholders will own about 36% of the combined company.
Watch the video below to get Jim Cramer's take on the proposed Halliburton-Baker Hughes merger:
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The merged company would generate slightly larger revenue than Schlumberger Ltd. (SLB) , claiming the title of the world's biggest oil services company.
Separately, TheStreet Ratings team rates BAKER HUGHES INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BAKER HUGHES INC (BHI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."