By JIM RUTLEDGE

D.C. Correspondent

CHICAGO, Ill. — Top U.S. grain merchant Archer Daniels Midland Co. (ADM) has reportedly approached rival Bunge Ltd. about a potential merger that would reduce the highly profitable corn, soybeans and wheat trading marketplace to just two mega-grain trading houses – and posing a intense antitrust review if the White Plains, N.Y.-based Bunge decided to engage in negotiations.

Both ADM and Bunge declined in emails to Farm World to comment on “market rumors or speculation.” The Wall Street Journal and the Financial Times reported on Jan. 19 that ADM had approached its U.S. rival, according to three unidentified people the two national newspapers said had been briefed on the matter.

Currently, Bunge and mining conglomerate Glencore plc of Baar, Switzerland, have a signed a “standstill agreement” that prevents any further talks between the two companies until next month, of a possible merger.

Wall Street bankers value Bunge at about $9.8 billion, while ADM’s valuation is estimated at $22.8 billion.

ADM and Bunge, along with Cargill, Inc. and Louis Dreyfus Co., are comprised of the so-called “ABCD” of the world’s top four grain traders, processing millions of tons of corn, soybeans and wheat annually into food or exports to China and other booming markets hungry for the U.S. premier grains.

Shawn Hackett, president of Hackett Financial Advisors of Florida, replied to an email inquiry from Farm World that he thought any deal between ADM and Bunge would be problematic since both “have so many redundant assets in the U.S., that a transaction would prove very messy and expensive.”

Of a deal between Bunge and Glencore, Hackett said, “I believe Glencore would be a much better fit. Glencore overlaps very little with Bunge.”

Glencore spokesman Charles Watenphul said in an email from Switzerland: “We are not commenting.”

Given the competing grain facilities operated in the United States by ADM and Bunge, any combination of the two would most likely face intense regulatory scrutiny by Department of Justice antitrust officials. Chicago-based ADM competes with Bunge in the buying, selling and processing of crops.

As one of the leading agricultural trading networks in the world, ADM in recent years has shifted its business strategy, focusing its investments in food ingredients and flavorings, which the company has said produces higher profits and has stabilized the often volatile grain markets.

ADM operates 500 crop buying facilities and 250 processing plants employing 32,000 people in 160 countries. Bunge operates hundreds of plants in North and South America and in Europe, employing more than 32,000 people.