OTTAWA, Jan 14 (Reuters) - Canada on Tuesday approved

with conditions U.S. grains merchant Bunge's $34 billion

merger with Glencore ( GLCNF )-backed Viterra, clearing one of the final

remaining obstacles for a global agriculture tie-up that is

unprecedented in dollar value.

The conditions for the approval include Bunge's divestiture

of six grain elevators in Western Canada and a binding

commitment from Bunge to invest at least C$520 million ($362

million) in Canada within the next five years, according to a

statement from the transport ministry.

The approval also requires strict and legally binding

controls on Bunge's minority stake in Saudi-owned grain company

G3 to ensure Bunge cannot influence G3's pricing or investment

decisions, the ministry said. Bunge, Viterra and G3 account for

a combined one-third of Western Canada's elevator capacity.

The merger, announced in 2023, would create a global crops

trading and processing giant worth $34 billion including debt,

closer in scale with chief rivals Archer-Daniels-Midland Co ( ADM )

and Cargill Inc.

"With the Canadian approval, we are nearing completion of

the regulatory process and expect to close in early 2025," Bunge

said in a statement to Reuters.

The deal, approved by shareholders, would make the combined

company better able to capitalize on an anticipated surge in

demand for soybean and canola oil to produce biofuels in coming

years than its rivals, but more consolidation in the industry

leaves farmers with fewer buyers for their crops.

Canada's antitrust watchdog flagged concerns around the deal

in April, saying in a non-binding report that the transaction

was likely to harm competition for grain purchasing in Western

Canada, as well as for selling canola oil in Eastern Canada.

The transport ministry said its conditions address the

concerns raised during the public interest assessment of the

acquisition.

Bunge CEO Greg Heckman had said that he did not see the need

for remedies in Canada.

In clearing the deal, the transport minister has required

the setting up of a price protection program for certain

purchasers of canola oil in Central and Atlantic Canada to

safeguard fair pricing and market stability.

"This decision underscores the importance of promoting

economic growth in Canada, while maintaining robust oversight to

protect competition and the public interest," Transport Minister

Anita Anand said in the statement.

($1 = 1.4355 Canadian dollars)