The steel industry is consolidating around the world

It said the deal would give it a "footprint" in North America, where its steel slabs could be used in Oregon's lucrative pipe and plate business.

Russian billionaire Roman Abramovich has a 41% stake in Evraz, which has been on an expansion drive amid global consolidation among steelmakers.

The combined company is set to produce 16.8 million tonnes of steel this year.

Evraz has offered $63.25 per share for Oregon Steel Mills, a premium of 22.3% to the company's average share price over the past three months.

Pipes and rails

The Oregon Steel Mills board has recommended the offer to the firm's shareholders.

"We are excited to bring together these two companies, which combined will enjoy exposure to some of the fastest growing, most profitable steel segments," said Alexander Frolov, Evraz chairman.

He said merging with Oregon Steel Mills would create the world's largest rail producer, and give Evraz access to the expanding North American oil and gas pipeline market..

Listed on the London Stock Exchange, Evraz owns three of the largest steel plants in Russia and sites in Italy and the Czech Republic.

It also has coal and iron ore mining businesses.