The friendly acquisition will give First Majestic (TSX:FR) access to Orko's (TSXV:OK) large silver deposits in the state of Durango.
The offer values each Orko share at $2.72, a premium of more than 70 per cent over its closing price of $1.58 on Friday.
Both companies say the transaction would be attractive to their respective shareholders.
The deal still needs shareholder and regulatory approvals.
Both companies are based in Vancouver.