WASHINGTON — Two companies crucial to the business of U.S. energy exploration have abandoned their planned $34 billion merger, the Justice Department said Sunday.

The department filed suit April 6 to block the merger of Halliburton and Baker Hughes. It claims the transaction would unlawfully eliminate significant competition in almost two dozen markets crucial to the exploration and production of oil and natural gas in the U.S.

“The companies’ decision to abandon this transaction — which would have left many oil field service markets in the hands of a duopoly — is a victory for the U.S. economy and for all Americans,” Attorney General Loretta E. Lynch said Sunday.

Justice officials said the merger of Halliburton and Baker Hughes would have raised prices, decreased output and lessened innovation in at least 23 oil field products and services critical to the nation’s energy supply.

As part of the agreement, Halliburton will pay Baker Hughes the termination fee of $3.5 billion by Wednesday, according to a joint release from the companies.

Halliburton and Baker Hughes announced their plan to combine in November 2014, shortly after oil prices began to fall. Few, however, predicted the depth and duration of lower prices caused by a global oversupply of oil.

The glut slowed demand for drilling services and crushed the stock price of both companies.

The Justice Department indicated its concern about the acquisition in a lawsuit it filed against ValueAct Capital, a hedge fund that had bought more than $2.5 billion in Halliburton and Baker Hughes stocks.