China National Bluestar has agreed to buy solar panel maker REC Solar for 4.34 billion Norwegian crowns ($640 million), planning to combine it with another Norwegian asset it picked up in 2011.

Bluestar said on Monday it would pay a 15.9 percent premium to the stock's last close in a deal unanimously recommended by REC Solar's board of directors, and would combine it with its solar grade silicon maker Elkem.

The deal comes nearly a year and a half after REC spun off its solar panel arm, moving its headquarters to Singapore from Norway and effectively putting the company up for sale.

At 0800 GMT (3 a.m. ET), REC Solar shares traded 14.1 percent higher at 107 crowns, just below Bluestar's 108.5 per share bid, indicating that shareholders do not expect a higher offer.

Struggling with high costs and cut price competition from China, REC Solar moved its production from Norway, one of the most expensive countries in the world, setting up its operating headquarters in Singapore.

REC Solar has continued to struggle with weak markets and poor margins this year, and its third-quarter sales and profit both fell sharply compared with the previous quarter as solar panel prices fell by nearly 5 percent on the quarter.

In 2011, Bluestar bought Norway's Elkem for $2 billion in one of the biggest industrial takeovers by a Chinese group in Europe.

"The Elkem Group has a strategic goal to grow its presence in the solar industry," Elkem CEO Helge Aasen said in a statement. "The ambition is to establish a leading integrated photovoltaic system player."

Nomura is acting as financial adviser to REC Solar, while DNB Markets is acting as financial adviser to Elkem.