Tata Steel is planning to sell its Long Products division, which employs 6,500 in the UK and Europe.
Indian-based Tata said it had signed an agreement with Klesch Group, a company with headquarters in Geneva, which it hoped would lead to a sale.
The division includes operations in Scunthorpe and Teesside in England and Dalzell and Clydebridge in Scotland.
It also includes sites in Workington and York, as well as other operations in France and Germany.
Tata has signed a memorandum of understanding with the industrial and commodities group, formalising its intention to agree a sale.
"We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome," Karl Koehler, chief executive of Tata Steel's European operations, said in a statement.
The Klesch Group, run by US billionaire investor Gary Klesch, is also investing in an oil refinery in Milford Haven in Wales.
