The purchase is the first major China-Norway business deal since Beijing raged at the October attribution of the Nobel Peace Prize to jailed dissident Liu Xiaobo and Oslo hopes it will help ease bilateral ties.

BlueStar will acquire almost all of Elkem's business with the exception of its energy unit Elkem Energi, which will remain in the hands of its parent company Orkla.

The $2.0 billion in cash paid by the Chinese company is at the lower end of the scale of analysts' estimates for the Norwegian firm, valued at $1.7 to $2.5 billion, prompting some to call the deal a disappointment.

"We have been getting used to Orkla selling assets at very good prices so it might be a slight disappointment that they weren't able to get a higher premium," Peter Haagensen, an analyst with Fondfinans in Oslo, told Dow Jones Newswires.

Orkla shares, which gained 2.7 percent on Monday when it confirmed it was in talks with BlueStar, were down 1.57 percent to 56.50 kroner shortly after 1030 GMT.

Orkla chief executive Bjoern Wiggen praised the Elkem deal as in line with the company's "strategy of a more focused portfolio towards branded consumer goods and aluminium solutions, and a reduction of the group's exposure to the solar industry."

The company is involved in sectors ranging from consumer goods to materials to the energy sector but has said it wanted to refocus its activities.

BlueStar, held 80 percent by Chinese state-owned giant ChinaChem and 20 percent by US private equity firm Blackstone, said Tuesday it saw "huge potential for Elkem's new solar-grade technology."

The sale, set to be concluded in the first half of 2011, marks the first major business deal between Norway and China since Beijing condemned the Norwegian Nobel Committee's 2010 pick for the Peace Prize and indefinitely postponed free trade talks with Oslo.

Three months after the tiff erupted, Oslo voiced hopes that the Elkem purchase could signal a new era in Sino-Norwegian bilateral trade.

"If (the sale of Elkem) goes through, I think it shows that the Chinese position is that it's 'business as usual'," Norwegian Trade Minister Trond Giske told TV2 Nyhetskanalen.

BlueStar has bought a number of international companies since 2006, including French Rhodia's silicone subsidiary in 2007 and Australian company Qenos. Its turnover was more than $6.0 billion in 2010.

Elkem's turnover is by comparison a little over $1.0 billion.

"It is important to secure ... a new owner able to further develop (Elkem's) potential and keep its competence and resources united," Wiggen said.

"BlueStar has the best attributes to take advantage of the potential of Elkem's technological strength and competence," he added.

Norwegian media reported other groups had been interested in acquiring Elkem such as Globe Specialty Metals of the United States and South Korea's Posco.

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