General Electric Co. won U.S. antitrust approval to merge its oil and gas business with Baker Hughes Inc. to form a new publicly traded company, the Justice Department said on June 12.

GE and Baker Hughes announced the deal in October, months after Halliburton's effort to buy Baker Hughes collapsed under pressure from the Justice Department.

Under the agreement, GE will combine Baker Hughes with its oil and gas business, creating a company with $23 billion in annual revenue, the companies said.

GE will pay existing Baker Hughes shareholders $7.4 billion for a special dividend.

Following the approval, shares of Baker Hughes added slightly to gains to close up 1.1% at $56.16.

GE is already the world's largest oilfield equipment maker, supplying blowout preventers, pumps and compressors used in exploration and production. It has also invested heavily in large data processing services just as the oil industry eyes its potential to boost oil recovery.

Baker Hughes is seen as one of the world leaders in horizontal drilling, chemicals used to frack and other services key to oil production.

The deal was approved on condition that GE sell its Water & Process Technologies business, the department said. The asset sale was required because GE and Baker Hughes are two of four companies that sell refineries the specialized chemicals they need to remove impurities from hydrocarbons, the department said in a court filing.

GE will sell the assets to French waste and water group Suez (SEVI.PA) for $3.4 billion, the company said in a statement.

Baker Hughes has some 35% of the market for refinery process chemicals, while GE has about 20%, the department said in a court filing.

"Today’s milestone represents significant progress toward creating an oil and gas productivity leader," the companies said in a statement.

The European Union approved the deal in late May.