Tata Steel have formally unveiled intentions for a merger of their European steel operations with German company Thyssenkrupp after a memorandum of understanding was signed.
The companies said the move will lead to the creation of a leading European steel enterprise.
Merger talks started around 18 months ago after Tata decided not to sell its UK steel business.
The flat steel businesses of the two companies in Europe and the steel mill services of the Thyssenkrupp group will merge in the proposed 50:50 joint venture.
The companies employ around 48,000 workers, with Tata owning UK plants including Port Talbot in South Wales, which employs 4,000.
Steel trade union Community say they "cautiously welcome" the news.