Both companies are headquartered in Fort Wayne. OmniSource is one of the nation's largest steel recyclers, and will operate as a subsidiary of Steel Dynamics.
OmniSource President and CEO Danny Rifkin will become Steel Dynamics' executive vice president of a new recycled metals unit. He also will become a director.
Eliminating duplicate operations is expected to save Steel Dynamics $15 million a year.
The deal is expected to close in November.
The acquisition is the latest in a string of announcements issued by the Fort Wayne minimill company. In July, Steel Dynamics said it would spend $75 million to add a second casting operation to the structural steel and rail mill it operates in nearby Columbia City.
On Sept. 20 it said it would move ahead with a long-planned iron nugget project near Hoyt Lakes, Minn. The Mesabi Nugget plant will make an iron nugget for use by minimills in melting and recycling metal. Steel Dynamics will spend $85 million and hold an 81-percent equity stake in the joint venture with Kobe Steel of Japan.