Bayer AG BAYRY 1.19% 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. That would bring the deal's total value to almost $66 billion including debt. Monsanto acknowledged the improved offer, and called the discussions with Bayer “constructive.”

“Monsanto is continuing these conversations as it evaluates this proposal, as well as proposals from other parties and other strategic alternatives to enable its Board of Directors to determine if a transaction in the best interests of its shareowners can be realized,” officials for the company said. Bayer has said the combining the companies -- which would need regulatory approval -- would generate synergies of $1.5 billion over three years. Monsanto shares in New York closed Friday at $107.44, suggesting investors were cautious about the prospects of a successful deal.
Bayer reproposes to buy Monsanto at a new exchange of US$65 billion including debt.