The German pharmaceutical giant Bayer has put in an unexpected bid to take over the US group Monsanto, the biggest seed company in the world.
The two have said they have met in a ‘private discussion’ of a negotiated acquisition, emphasizing that negotiations are only exploratory.
"There is no assurance that any transaction will be entered into or consummated, or on what terms," Monsanto said, while Bayer insisted the talks were still only "preliminary" and "a further statement will be made as appropriate."
Speculation is that the unsolicited bid could be worth more than $40 billion (£27 billion).
The result could be a “leading integrated agricultural business”, according to Bayer, which would produce pesticides and seeds for genetically modified crops along with a number of drugs, including birth control pills.
Monsanto is valued at $42 billion. Last year it tried but failed to buy Swiss pesticides company Syngenta for $47 billion which was eventually purchased by China National Chemical Corp for $43 billion, the largest foreign acquisition by any Chinese company.
US regulators are now scrutinising the deal and any impact on the security of the US food supply.
The shareholders of Monsanto will have to consider the unsolicited takeover bid while US authorities would likely investigate over antitrust issues.
Monsanto, which employs about 20,000 workers, is a major manufacturer of agricultural seeds and herbicides and describes itself as one of the world's leading biotechnology companies.
The Missouri-based firm is often in the headlines, most recently over the potentially toxic nature of its glyphosate weedkiller and its impact on biodiversity.
The combined share of the pesticide market for Bayer and Monsanto would be nearly 25%.
Yesterday, Portugal's parliament voted to continue the use of the weedkiller Roundup in urban areas amid reports from the scientific community concluding that one of its constituents is likley to be carcinogenic.
