* Bunge to buy Brazilian sugar and ethanol producer Moema
* Bunge's biggest move yet in sugar cane
* Bunge may buy out more mills, taking deal to $1.5 bln
* Bunge shares up 1.7 pct (Recasts, adds details on capacity, context, quotes, share price)
SAO PAULO, Dec 24 - U.S. agribusiness giant Bunge Ltd (BG.N) will buy Brazilian sugar and ethanol producer Moema for $452 million, its biggest bet yet on the fast-growing cane and ethanol industry in the world's top exporter.
The takeover, the second deal of its size in three months after Louis Dreyfus bought into the sector, is the latest in a wave of consolidation in Brazil's massive sugar industry, where heavily-leveraged mills struggling to cope with the global economic crisis are vulnerable to buyouts.
The deal will more than double Bunge's cane milling capacity in Brazil, where it has operated for a century and already has two mills and is building a third.
Under the terms of the deal, Moema's controlling shareholders will get 7.3 million shares in Bunge, which includes a $36 million payment for working capital.
The deal includes $480 million in debt owed by Moema Participacoes, as the Brazilian group's holding company is formally known.
The fragile state which some groups were in is allowing a bigger influx of foreign capital and an increase in consolidation, said Plinio Nastari, president of Datagro, a sugar and ethanol consulting firm based in Brazil.
High production costs this season, caused by the excess rains that hit cane yields, made the situation even worse for several groups, he added.
Bunge, a powerhouse grains trader, becomes a leading player in sugar with the deal, this year's hottest commodity.
It is the latest in a string of foreign companies to secure a stronger foothold in Brazil's sugar and ethanol sector, long dominated by family-owned firms reluctant to share ownership.
In October, French commodities group Louis Dreyfus unveiled plans to acquire Brazil's Santelisa Vale to create the world's second-largest cane processor.
Multinationals such as Cargill Inc [CARG.UL] and even oil majors like BP (BP.L) are investing in Brazil's cane industry, seeking to benefit from an expected surge in demand for biofuels like cane-based ethanol.
For a related factbox, see [ID:nN24182999].
OPTION TO INCREASE STAKE
The deal will give Bunge full ownership of one of Moema's mills and a stake in four of the five other mills in which the group is a partner. Moema's stake in the mills gives Bunge access to 9.3 million tonnes of annual crushing capacity and potentially 15.4 million tonnes if it obtains full ownership, which it said may be possible within 90 days.
Brazil's Cosan (CSAN3.SA), the world's largest sugar and ethanol producer, has an annual crushing capacity of around 60 million tonnes. The Louis Dreyfus venture in Brazil, called LDC-SEV, has annual capacity of 40 million tonnes.
If Bunge acquires all the remaining stakes in the mills in which Moema is a partner, that could lift the total value of the deal to $1.48 billion, including $710 million in debt and excluding working capital.
Bunge said the deals would add to its earnings per share in the first 12 months of closing.
Moema's mills are clustered in the north of Sao Paulo state, the heartland of Brazilian sugar cane country.
Alex Oliveira, senior sugar analyst at the Newedge brokerage in New York, said the deal would enable Bunge to lower their own costs and improve profit margins.
The whole idea is to rely less on producers. They want to do their own thing, he said.
Still, some voiced doubts about the deal. Moody's Investors Service revised Bunge's rating outlook to negative from stable, citing concerns about the company's financial health.
Demand for cane-based ethanol in Brazil has soared this decade with the advent of so-called flex-fuel cars, which can run purely on ethanol, gasoline or any mixture of both.
Bunge expects ethanol demand in Brazil to rise sharply in the coming years, based on forecasts the country's flex-fuel car fleet could expand at about 18 percent a year by 2015.
For sugar and energy, Brazil is the ideal place to invest, Bunge Chairman and Chief Executive Alberto Weisser said in a statement.
Its domestic market is growing rapidly. Since the country has the lowest production cost in the world, it is well positioned to increase its exports as much for sugar as for ethanol.
Moema, 35 percent of which is owned by Brazilian sugar and ethanol tycoon Maurilio Biagi Filho, was also in the sights of Brazilian cane milling rivals Cosan (CZZ.N), Sao Martinho (SMTO3.SA) and Acucar Guarani (ACGU3.SA), local newspaper Valor Economico reported.
Bunge shares rose 1.7 percent on Thursday in New York, closing at $63. (Additional reporting by Ashutosh Joshi in Bangalore, Inae Riveras in Sao Paulo and Rene Pastor in New York; Editing by Todd Benson and Tim Dobbyn)