Bayer holds talks to buy Monsanto

German firm Bayer is holding negotiations to acquire US-based Monsanto, a move that is likely to come under stringent regulatory scrutiny.

In a statement, the Leverkusen-based company said: "Bayer executives recently met with executives of Monsanto to privately discuss a negotiated acquisition of Monsanto Company."

"The proposed combination would reinforce Bayer as a global innovation-driven life science company with leadership positions in its core segments, and would create a leading integrated agriculture business."

Bayer stated that the talks were still in the preliminary stage.

Following this, Monsanto issued a statement that read: "In response to recent media reports, Monsanto Company disclosed that it has received an unsolicited, non-binding proposal from Bayer AG for a potential acquisition of Monsanto, subject to due diligence, regulatory approvals and other conditions."

For weeks, there have been speculations that Bayer plans to acquire Monsanto for $40bn.

More than six months ago, Dow Chemical and DuPont reached an agreement that would see the merged entity being divided into three new companies with one focusing on agriculture. In addition, China National Chemical agreed to purchase Syngenta, reported The Wall Street Journal.

Both deals are being scrutinised by regulatory authorities.

If the merger of Bayer and Monsanto proceeds, there are concerns that it would further limit market competition and increase prices for US farmers.

Monsanto has a workforce of more than 20,000 employees, and produces seeds for fruits, vegetables and important crops such as corn and soybeans.

Bayer employs approximately 117,000 workers and has global sales of €46.3bn.