LNM Group, the steel giant headed by Indian tycoon Lakshmi Mittal, has snapped up Bosnia's BH Steel in a deal worth $280m.
The deal comprises an upfront payment of $80m (£43.2m), and a commitment to invest a further $200m over ten years.
The BH sale is a boost for Bosnia, which is struggling to rebuild its economy from the wreckage of the conflict in former Yugoslavia.
The country has attracted just $1.6bn in foreign investment since 1995.
BH's main asset is a steel plant in the central Bosnian town of Zenica, once the biggest steel producer in former Yugoslavia.
BH's former owners, Bosnia's Muslim-Croat Federation and the Kuwaiti Investment Agency, will retain minority stakes.
The Bosnian authorities hope the deal, the country's single biggest foreign investment to date, will help restore BH's output to the 1.8 million tons a year it produced before the war.
"The entrance of a partner like LNM will allow Bosnia additional business development and will also help development of the region," said Izet Zigic, industry minister at Bosnia's Muslim-Croat Federation.
LNM has said it aims to take on more than 1,000 workers, increasing BH's total workforce to more than 4,000 people.
LNM, which already owns a string of steel firms across eastern Europe, has a track record of buying and revitalising failing steel mills.