Bayer raises offer to buy Monsanto

Bayer AG raised its offer to buy Monsanto Co. and create a new global leader in seeds and pesticides, though the German firm said the higher price depended on achieving a "negotiated transaction."

Bayer, which has been discussing a deal with Monsanto since mid-May, said it would pay $127.50 a share for the St. Louis-based biotech seed giant, up from its previous offer of $125 a share.

Representatives for Monsanto had no immediate comment.

Executives of the pharmaceutical giant have said that acquiring Monsanto, the world's largest supplier of crop seeds and genes, will create a global firm with a deep portfolio in pesticides, positioned to help farmers around the world produce food for a growing and more affluent population.

Werner Baumann, who took over as Bayer's chief executive just weeks before launching what would be the aspirin maker's biggest-ever acquisition, is pursuing the deal as rivals in the $100 billion global market for seeds and pesticides seal their own mergers. Mr. Baumann has faced pushback from some Bayer shareholders, however, who have worried about Bayer shifting focus away from its pharma division.

Monsanto has said it sees the virtues of combining its prowess in seeds with Bayer's much broader range of pesticides, but Monsanto's board in July unanimously rejected Bayer's previous offer of $125 a share as too low and "insufficient to ensure deal certainty." Analysts have said around $135 to $140 a share may be a more realistic price.

Bayer said Monday that there was no assurance a deal would be struck, and if one was, it would remain subject to regulatory approvals.