(Adds estimated size of the deal, industry background)
SAO PAULO, April 29 (Reuters) - Brazilian grains company Fiagril Participações SA sold a controlling stake to China’s Hunan Dakang Pasture Farming Co Ltd, a unit of Shanghai Pengxin Group Co, the Brazilian company said on Friday.
Two sources with direct knowledge of the deal said the Chinese firm bought a 57 percent stake in family-owned Fiagril, the latest move by Chinese agricultural merchants seeking to secure future supply of food in Brazil.
The first source, who requested anonymity because terms of the deal remain private, said the value of the deal could be around 1 billion reais ($290 million). The second source said that current management will be kept in place.
Fiagril released a statement but it gave few details.
Under terms of the deal, Pengxin will provide fresh financing to Fiagril through working capital loans, the first source said.
Fiagril Chairman Marino Franz said in the statement the company will be able to grow after the agreement. Fiagril, which has grains trading and processing operations, is based in Lucas do Rio Verde in Mato Grosso state, in the heart of Brazil’s center-west grain belt.
Fiagril negotiates the purchase of soybeans and corn directly with farmers, to whom the company also supplies fertilizers and pesticides.
The deal will exclude Fiagril’s shipping, biofuels and seed production businesses.
The Fiagril acquisition marks a further step in recent efforts by Chinese merchants to get a grip on Brazil’s thriving grains production and export market.
Flush with cash, Chinese firms including China National Cereals, Oils and Foodstuffs Corp, or Cofco, are aggressively wrestling market share from their larger Western rivals.
Recent transactions include Cofco’s purchase of controlling stakes in Dutch trader Nidera Holdings BV and Noble Group Ltd’s agribusiness unit, which gave the Chinese firm access to sugar mills and grain production platforms in Brazil and Argentina.
An analysis of shipping data by Thomson Reuters found that Cofco and Asian peers bought 45 percent of Brazil’s soybean, corn and soymeal exports last year.
By comparison, the share purchased by trading houses Archer Daniels Midland Co, Bunge Ltd, Cargill Inc and Louis Dreyfus Corp fell to 37 percent.
The Pengxin-Fiagril transaction comes as Brazil, the world’s largest soybean exporter, is in the midst of a record harvest. That follows a record corn export season. ($1 = 3.4537 Brazilian reais) (Reporting by Tatiana Bautzer, Roberto Samora and Guillermo Parra-Bernal, Editing by G Crosse and Matthew Lewis)