The transaction, which includes all of the assets and liabilities of REC Solar, has a cash purchase price of NOK108.5 per share.
REC Solar, which employs 1,700 people globally, generated revenues of $647m in 2013, with total assets of $450m as per 31 December.
The transaction, which is subject to regulatory approvals, is anticipated to be completed in March/April 2015.
Nomura International is acting as financial adviser to REC Solar while DNB Markets is the financial adviser to Bluestar Elkem.
Elkem CEO Helge Aasen said: "The Elkem Group has a strategic goal to grow its presence in the solar industry. The ambition is to establish a leading integrated PV player.
"The Elkem Group and REC Solar have developed a strong business relationship and there is a good strategic match between the companies ensuring that a combined entity will have a strong basis for further development of the business by leveraging REC Solar’s leading global brand, strong distribution channels and reputation for quality."
REC Solar chairman Ole Enger said: "The board of directors of REC Solar views the combination as a positive outcome for the company, its excellent workforce and other stakeholders, and we look forward to working with the Elkem Group to complete the transaction."
REC Solar spun off in October 2013 from Renewable Energy Corp, which had closed its entire solar manufacturing capacity in Norway and focused on solar polysilicon business.
