Bunge's $34 billion Viterra merger clears final China hurdle

By Karl Plume

CHICAGO (Reuters) -Global agribusiness Bunge Global SA said Friday it has received regulatory approval from China for its merger with Glencore-backed grain handler Viterra, the final hurdle for its $34 billion mega-deal announced two years ago.

The Missouri-based company expects to close the largest-ever global agriculture merger by dollar value "on or around July 2," Bunge said in an emailed statement.

Bunge shares were up 5.7% by mid afternoon on Friday, extending earlier gains stemming from surging crude oil prices and favorable U.S. biofuel blending proposals from the Environmental Protection Agency on Friday.

Approval from China was the last regulatory approval Bunge needed to finalize the deal after gaining conditional approvals from regulators in Canada, the European Union and other markets in recent months.

"Achieving this regulatory milestone is a significant step forward and clears the way for closing of the transaction. This approval underscores the strategic rationale behind bringing Bunge and Viterra together to create a premier global agribusiness company," CEO Greg Heckman said in an emailed statement.

The deal will create a global crop trading and processing giant closer in scale to chief rivals Archer-Daniels-Midland and Cargill, although it had sparked competition concerns and heightened regulatory scrutiny that delayed closing of the transaction for nearly a year.

"We will see further consolidation in the grain merchandising and processing industry. Given greater price transparency for both farmers and the agribusiness's customers, I don't see a huge change in competitive dynamics over the long term," said Seth Goldstein, equity strategist with Morningstar Research Services LLC.

 The merger will enhance Bunge's grain exporting and oilseed processing businesses in the U.S., where it has a smaller presence than ADM and Cargill.

The deal also expands Bunge's export capacity and physical grain storage and handling footprint in major global wheat suppliers Canada and Australia.

Bunge and its agribusiness rivals have seen earnings erode in recent quarters on slumping demand and a global glut of crops that they trade, store and process into food, livestock feed and biofuel feedstocks. Tariff and biofuel policy uncertainty further weighed on profits for Bunge, the world's largest oilseed crusher.

(Reporting by Karl Plume in ChicagoEditing by Marguerita Choy)