German drug and farm chemical company Bayer AG says it has signed a deal to acquire seed and weed-killer company Monsanto for $US66 billion ($A88 billion).
Bayer says it is paying Monsanto shareholders $US128 per share, which represents a 44 per cent premium over Monsanto's closing price on May 9, the day before a proposed deal was announced.
The deal is subject to approval by Monsanto shareholders and anti-trust regulators.
Bayer said Wednesday the transaction brings together two different but complementary companies. Bayer makes a wide range of crop protection chemicals, while Monsanto is known for its seeds business.
Leverkusen-based Bayer said the merged companies' agriculture business would have its seeds business and North American business headquarters in St Louis, Missouri, where Monsanto is currently based.
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The deal creates the world's biggest maker of seeds and pesticides.
