Anglo-Dutch steel firm Corus has confirmed it is accepting a £4.3bn ($8.1bn) takeover offer from Indian rival Tata Steel.
Corus employs 24,000 people in the UK
The acceptance of the deal, revealed by the BBC on Thursday, is the largest Indian takeover of a foreign company.
If approved by Corus shareholders, it would create the world's fifth-biggest steel firm.
Corus employs 47,300 people worldwide, including 24,000 in the UK at plants at Port Talbot, Scunthorpe and Rotherham.
The firm was formed out of the 1999 merger of British Steel and Dutch group Hoogovens.
The 455p-a-share offer is below the current price of Corus shares, which were trading at 474p on Friday.
Tata has pledged to pay £126m into the Corus pension fund as part of the deal, and will increase the annual contributions to the British Steel fund.
It added it did not plan to relocate any Corus plants, but Tata said job cuts could not be ruled out in the long-term.
Changing of the guard
Corus chairman Jim Leng said the deal was the culmination of talks with firms in Brazil, Russia and India.
"This combination with Tata, for Corus shareholders and employees alike, represents the right partner at the right time at the right price and on the right terms," he said.
In 2005, Tata Steel was the world's 56th biggest steel producer. Its takeover of Corus represents its first expansion outside of Asia.
Tata chairman Ratan Tata said the takeover would be a "defining moment" for the firm.
GLOBAL STEEL PRODUCTION 2005
1. Mittal Steel - 49.89 million tonnes
2. Arcelor- 46.65
3. Nippon Steel - 32.91
4. Posco - 31.42
5. JFE Steel - 29.57
6. Shanghai Baosteel - 22.73
7. US Steel - 19.26
8. Nucor - 18.45
9. Corus - 18.18
10. Riva - 17.53
56. Tata - 4.4
Source: Metal Bulletin
"It's entirely consistent with our strategy of growth through international expansion," he said.
"Corus and Tata Steel are companies with long, proud histories. Together we will be even better equipped to remain at the leading edge of the fast-changing steel industry."
BBC business editor Robert Peston said the proposed acquisition was "the changing of the guard on a global scale".
Some analysts said they expected the move by Tata to spark a takeover war.
Severstal, the Russian steel giant controlled by Alexei Mordashov, is among those who must decide whether to launch a hostile bid.
Analysts broadly welcomed the deal, but warned that there were risks.
The biggest one is said to be that if there is an economic downturn over the coming years, Tata Steel might have difficulty paying off the £1bn of debt it is taking on to buy Corus.
In those circumstances there might be dangers for Corus' pension fund, which has 166,000 members in the UK.
Unions reacted with caution to the news of the deal.
"The assurances on jobs look very brittle at the moment," said Transport and General Workers Union national secretary John Rowse.
"This is still a big operation in the UK and we would want to know what the deal means for our members' jobs in the manufacturing side of Corus as well as all the former workers whose pensions are also very much on our mind."
Denis MacShane, the MP for Rotherham and chairman of the Steel Group of MPs, told the BBC he was positive about the deal.
The takeover comes amid growing consolidation in the global steel industry.
With prices and demand soaring, Mittal Steel - the world's largest steel firm - bought European rival Arcelor for $34bn earlier this year.
Tata Steel is part of the wider Tata group, which has business interests ranging from carmaking to Tetley's tea.