UPDATE 2-Dreyfus takes over Brazil's Santelisa, plans IPO

* Louis Dreyfus agrees to take over Brazil's Santelisa

* French group, financial partners pledge $460.6 mln

* LDC-SEV venture plan IPO to fund aggressive expansion (Adds value of deal in paragraph 5; may end BP joint venture)

SAO PAULO, Oct 27 - The Brazilian unit of French commodities group Louis Dreyfus said on Tuesday it agreed to take over Brazilian firm Santelisa Vale to create the world's second largest sugar cane processor.

Local unit Louis Dreyfus Commodities Bioenergia and Santelisa Vale said the new venture, called LDC-SEV, will control 13 plants and have annual cane crushing capacity of 40 million tonnes, second only to Brazil's Cosan.

Louis Dreyfus and a group of financial partners pledged 800 million reais ($460.6 million) to the venture, the French group said, adding that it will also assume an undisclosed amount of debt.

Dreyfus will hold a 60 percent stake in the new venture, Santelisa Vale shareholders will have 18 percent, third party investors 9 percent and the remaining 13 percent of the company will be in the hands of banks Goldman Sachs and Brazil's BNDES development bank, LDC-SEV Chief Executive Bruno Melcher said.

He added that the estimated value of LDC-SEV is 8 billion reais, which would be greater than the value of Cosan Ltd, Brazil's largest sugar and ethanol producer, which has nearly 50 percent more crushing capacity.

The merged company is expected to have savings of 100 million reais a year due to synergies.

LDC-SEV may also end its participation in Tropical Bioenergia, a biofuels joint venture it entered in 2008 with British oil major BP Plc and local grain and oilseed producer Maeda, Melcher said.

The company plans to take on new financial backers as well, some of which could be development banks from other countries and other investors.

The companies said they plan an initial public offering for the venture to fund future expansion, which could be held in three to five years, or sooner, depending on market conditions.

"LDC-SEV plan to have an IPO in the near future in a bid to guarantee access to the capital necessary to sustain its ambition to keep a leading role in growth and consolidation in Brazil's sugar and ethanol sector," the companies said in a statement. "LDC-SEV's expansion plan is aggressive." ($1=1.737 reais)