As oil and gas companies work their way through the worst slump in their industry in more than two decades, General Electric is making a huge move to bolster its own business that serves those companies.

The industrial conglomerate announced on Monday a deal to merge its oil and gas division with fellow services provider Baker Hughes, seeking to create a new giant in the field that could ride any recovery in oil prices.

“We can weather the cycle in the short term and we will be very well positioned to lead the industry going forward,” Jeffrey R. Immelt, G.E.’s chief executive, told analysts.

The complex transaction, coming months after the collapse of Baker Hughes’s planned merger with another oil field services company, Halliburton, will create a much bigger provider of equipment and services across the entire span of oil production, from drilling to pipelines to refineries.