Monsanto has accepted a takeover offer from Germany’s Bayer at $128 a share, the BBC has learned.
The move would be the biggest all-cash deal ever and will form the world’s biggest seeds and pesticides company worth $66bn (£50bn).
As well as farm-products, Bayer also sells healthcare products including Alka-Seltzer.
Monsanto is known for its genetically modified seeds for crops including corn, soybeans, cotton and wheat.
The use of such seeds has been attacked by some environmental activists.
The tie-up, which will give the new company control of more than 25% of the world’s supply of seeds and pesticides, comes amid a wave of mergers in the agriculture sector.
Rivals including Dow Chemical, DuPont and Syngenta have all announced tie-ups recently, although some have yet to be cleared by regulators.
Bayer’s takeover of Monsanto could draw close scrutiny from anti-competition regulators because of the sheer size of the combined company and the control it would have over the global seeds and sprays markets.
Farming groups have raised concerns that such mergers could lead to fewer choices and higher prices while opponents of genetically modified food in Europe worry about Monsanto’s influence on the continent.
There is a $2bn break fee if the deal does not complete.
Bayer shares are 3% higher in Frankfurt. Monsanto shares start trading when the US opens at 14:30BST.
Tags: agriculture, Alka-Seltzer, Bayer, Corn, cotton, Dow Chemical, DuPont, Europe, farm products, genetically modified food, genetically modified seeds, Genetically-modified, Germany, healthcare, Monsanto, pesticides, seeds, soybeans, Syngenta, wheat