(Adds BP declined to comment)
By Tatiana Bautzer
SAO PAULO, Aug 11 (Reuters) - UAE state investor Mubadala Investment Co and energy company Raizen SA are in the final round to acquire Brazilian ethanol joint venture BP Bunge Bioenergia, the world's third-largest sugarcane processor, one source with knowledge of the matter said on Wednesday.
There are no other bidders in the second round and former proposals from other companies were disqualified, the source said, asking for anonymity to disclose private talks.
Shareholders BP PLC and Bunge Ltd decided to negotiate with both bidders in a second phase because the difference between their proposals was very small, according to the source. There are parallel negotiations with both.
Although the deal is in its final stages, there is no clear deadline for reaching an agreement, nor a guarantee that a sale will be signed.
BP declined to comment. Mubadala and JPMorgan did not immediately comment on the matter. Raizen, a joint venture between Shell and Cosan SA declined to comment. Bunge said it "continues to assess options to exit our participation in our sugar and bioenergy joint venture".
Bunge has been trying to divest from its ethanol plants in Brazil for a while. In 2018, it considered an initial public offering before entering the joint venture with BP.
The deal gave BP a role in Brazil's ethanol market and already had clauses on exit rights after 18 months.
Brazilian newspaper Valor Economico reported on Tuesday about the sale and the interest from Mubadala and Raizen. BP Bunge Bioenergia owns 11 producing units with 33 million tonnes of sugar cane crushing capacity.
BP Bunge Bioenergia could be worth $1.8 billion, considering an industry average of $55 per tonne of crushing capacity.
This would be Mubadala´s first investment in ethanol in Brazil. The fund owns in the United States Enviva Partners, which produces wood pellets used for power generation.
Raizen, already the largest ethanol producer in the country, would consolidate its leadership. ($1 = 5.0849 reais) (Reporting by Tatiana Bautzer in Sao Paulo; additional reporting by Marcelo Teixeira in New York; Editing by Stephen Coates, Kirsten Donovan)