Steelmaker and distributor Esmark Inc. has agreed to a proposed merger with Essar Steel Holdings Ltd. at a price of about $670 million. A definitive agreement will follow a “right to bid” period – estimated at 52 days – required in the collective bargaining agreement with the United Steelworkers union. Esmark has also signed a commitment letter with Essar for a $110 million term loan, which will be used to refinance the existing term loan and provide new capital. Esmark acquired steelmaker Wheeling-Pittsburgh in November. Essar bought Canada’s Algoma Steel last June.

Essar, based in India, is currently building a $1.6 billion steel plant in Minnesota and intends to make significant investments in Wheeling-Pittsburgh. Esmark, now based in Wheeling, W.V., is a producer of carbon flat-rolled products.