* Takeover announcement could come on Tuesday
* Marubeni, Gavilon have been in talks since early May
* Gavilon's owners include George Soros
By Emi Emoto and Soyoung Kim
TOKYO/NEW YORK, May 28 (Reuters) - Japanese trading house Marubeni Corp is nearing a deal to buy U.S. grains merchant Gavilon for more than $5 billion including debt and could announce the transaction as early as Tuesday afternoon in Tokyo, according to people familiar with the matter.
Marubeni, Japan's fifth-largest trading company, has been in advanced talks to buy Gavilon since early May. The Japanese company has confirmed its interest in Gavilon but said no decision had been made.
Although the deal is pending final approval, the proposed terms value Gavilon at more than $5 billion including debt, and Marubeni has lined up financing for the deal, said the sources, who asked not to be named since the deal has not been announced.
A valuation at that level would be in line with the proposed terms the two sides have been discussing since early this month. People familiar with the matter told Reuters previously that Marubeni has offered to pay $5.2 billion for Gavilon, including assuming some $1.7 billion of debt the U.S. grain trader had at the end of December.
Representatives of Marubeni and Gavilon could not immediately be reached for comment.
Marubeni had earlier dispatched a team of auditors to Gavilon's Omaha, Nebraska, headquarters to review its operations and finances, sources have said.
In addition, Marubeni President Teruo Asada traveled to New York last week with other executives as discussion of the deal reached the final stages, a person familiar with the trip said.
Acquiring Gavilon would deepen Marubeni's control of grain supplies from North America, the world's top grain export hub.
"This acquisition supports an ongoing strategic plan by Asian grain importers to better secure future grain needs via the merger and acquisition process," said grains analyst Mike Zuzolo of Global Commodity Analytics.
He added: "Realizing that better supply-chain management should better prepare these importers in their global sourcing needs."
A deal could also help Marubeni challenge Archer Daniels Midland as the biggest supplier of U.S. grains and oilseeds to China.
Gavilon now has about 320 million bushels of storage in the United States, ranking third behind ADM and Cargill Inc but ahead of global grain giants like Bunge Ltd and Louis Dreyfus.
Marubeni's acquisition of Gavilon is unlikely to face any pushback from farmers and agricultural business which have long been accustomed to the presence of Japanese grain companies in the United States.
A combination of Marubeni and Gavilon is seen by analysts as a good commercial fit, marrying Gavilon's presence in the Central Plains and Midwest with Marubeni's operations in the Pacific Northwest - the shortest U.S. sea route to Asia.
Gavilon's owners include billionaire investor George Soros and hedge fund manager Dwight Anderson.
Gavilon also has a large footprint in the U.S. fertilizer market, an energy operation that includes 7 million barrels of crude oil storage and an oil, grain and ethanol trading unit.
Marubeni plans to announce the Gavilon deal as early as Tuesday afternoon Japan time, sources said.
Morgan Stanley is advising Gavilon on the transaction, while Nomura is advising Marubeni, people involved in the discussions have said.
Marubeni's rival trading houses Mitsui & Co and Mitsubishi Corp had both been seen as potential bidders for Gavilon but decided not to pursue a deal.
U.S. analysts say Marubeni's interest in Gavilon could be driven by a desire to grab a bigger share of the lucrative business of supplying grains to China, the world's top importer of soybeans and a fast-growing buyer of corn.
Marubeni is already the second-largest exporter of U.S. grains to China, with soybean shipments surging five-fold since 2008, based on data from trade intelligence firm PIERS.
Marubeni handled nearly 20 percent of China's soybean imports in 2010, according to its annual report.
Unlike Marubeni, Gavilon has not made deep inroads to China, having exported less than 10,000 tonnes of grains over the past two years, data showed.
Marubeni is the best-established "sogo shosha" - Japanese general trading firm - inside the U.S. grain belt.
In 2010, Marubeni overtook Japan's national federation of farm cooperatives Zen-noh as the biggest Japanese exporter of U.S. grains and oilseeds, according to PIERS data, and accounts for more than a third of all shipments by Japan-based firms.
Marubeni, which bought a Portland, Oregon, export elevator to improve its ability to supply Japan, is now eyeing increased shipments to China. In 2009 it signed a letter of intent with Sinograin, a Chinese state firm, to "work closely in coming years" to build state reserves and commercial grain supplies.