Tata Steel has signed an agreement to sell its speciality steel business for £100 million.
The sale to Liberty Steel could help secure 1,700 jobs at several sites in South Yorkshire.
The speciality steel business makes products for the aerospace, automotive and oil and gas industries.
It has the capability to produce around 1.1 million tonnes of liquid steel per year from recycled scrap, melted in two electric arc furnaces at Rotherham.
That feeds downstream casting, re-melting and rolling processes, producing a range of high-value steels.
Sanjeev Gupta, Executive Chairman of the Liberty House Group said: “I am proud that we are acquiring a world-class business with a very skilled workforce and broad range of high-value products. It is one of only a handful of such operations in the world and I am confident it will flourish within our group.”