Steel and Tube Holdings says it plans to buy Tata Steel International Australasia for $27.5 million.
The companies say the deal is important for them both as they each mark their 60th anniversaries this year.
Steel and Tube is paying cash for the business, which is part of India's Tata Steel group, one of the world's largest steel producers.
It supplies stainless steel, engineering steels and composite floor decks to the New Zealand and Pacific Island markets.
Steel and Tube chief executive Dave Taylor says the deal will help it strengthen its position as the country's leading steel distribution company.
He says the Tata acquisition is an excellent strategic fit for Steel and Tube, and means it can deliver more innovative products to customers.
The deal will go through on 14 April.