Monsanto accepts Bayer takeover

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.

The deal creates the world's biggest maker of seeds and pesticides.