Collapsed Black Country steel firm Aartee Bright Bar is set to be merged with Liberty Steel Group after steel tycoon Sanjeev Gupta stepped in to take over the business.
GFG Alliance, owned by Mr Gupta and his family, has bought Aartee Bright Bar's owner Aartee Group Pte and filed an application to challenge the administration.
The rescue deal comes after Aartee Bright Bar, said to be the UK's largest distributor of engineering steel products and a key customer of Mr Gupta's Liberty Steel, called in administrators Alvarez & Marsal earlier this month. The Willenhall-based business blamed tough economic conditions and surging metal costs for the downfall.
GFG Alliance's application to challenge the administration was being supported by a majority of business creditors, it said, as it seeks to restart operations in a bid to save the firm's 250 staff.
They operate from two production sites, in Willenhall and Dudley, alongside distribution and sales offices in Rugby, Southampton, Bolton and Newport in South Wales. Over time, the business would be integrated into Liberty's operations.
Jeffrey Kabel, the chief transformation officer at GFG Alliance, said: "Aartee Bright Bar is a significant part of the UK's steel supply chain and distribution network and a key customer for GFG Alliance's bar products, produced in Rotherham by Liberty.
"Our rescue plan would save 250 viable steel jobs in the West Midlands and across the UK. Over time, Aartee's business would be integrated into Liberty's operations helping to reinforce our UK transformation plan focused on producing specialist steel products."
The steelworkers' union, Community, said the rescue deal was good news for workers and that Aartee Bright Bar seemed a "natural fit" for GFG Alliance which has about 35,000 staff in ten countries. The union's national officer Alun Davies said the news was very encouraging.
"While we await further details about GFG Alliance's plans for Aartee Bright Bar, this development will, no doubt, be welcomed by both the Aartee workforce as well as those working across the supply chain," he added.
