The combined company, to be named RHI Magnesita, will be established in the Netherlands and listed in London, with RHI ceasing its listing in Vienna.
The transaction is expected to be completed in 2017.
Under the deal, RHI will acquire a controlling stake of at least 46%, but no more than 50% plus one share, in Magnesita, the firms said in separate statements on October 6.
RHI and Magnesita, which will remain separate until the deal's conclusion, reported revenues of 1.75bn euros (US$1.92bn) and US$1.013bn in 2015, respectively.
Magnesita is Latin America's largest refractory brick manufacturer, operating 28 mining and industrial units with refractory brick production capacity of over 1.4Mt/y.