After sources close to negotiations between German pharma and chemical giant Bayer and the world’s largest seed company Monsanto said that a Bayer Takeover of the Missouri-based agribusiness was “imminent” on Wednesday, Bayer broke news of a $66 billion takeover at lunch time.

Monsanto’s sales account for 23% of the global proprietary seed market, but its failed bid for Swiss competitor Syngenta early in 2016 left it vulnerable to a takeover bid itself, as a slew of proposed mergers and acquisitions amongst the world’s largest agribusinesses have led to concerns about consolidation in an industry that is already dominated by a few powerful players.

The Bayer-Monsanto deal is set to create the world’s largest integrated agriculture company and marks the largest ever takeover by a German company.

Early on Wednesday, sources close to the talks told both the Financial Times and news agency Reuters that a deal was “imminent”. Bayer was reported to have upped its offer to $129 a share, from $127.50 announced last week. Monsanto was said to be holding out for $130, but the reported bid remains much higher than Monsanto’s closing price on Tuesday.

In the event, Bayer announced that an all-cash deal had been struck at $128 per share, representing a 44 percent premium to Monsanto shareholders.

Bayer announced on Wednesday that Monsanto’s Board of Directors, Bayer’s Board of Management and its Supervisory Board had all unanimously approved the agreement. According to Bayer, the agriculture business that comes out of the merger will have its global Seeds & Traits and North American commercial headquarters in St. Louis, Missouri, its global Crop Protection and overall Crop Science headquarters in Monheim, Germany, and an important presence in Durham, North Carolina.

Commenting on Wednesday, Bayer CEO Werner Baumann said, “We are pleased to announce the combination of our two great organizations. This represents a major step forward for our Crop Science business and reinforces Bayer’s leadership position as a global innovation driven Life Science company with leadership positions in its core segments, delivering substantial value to shareholders, our customers, employees and society at large.”

Monsanto chair and CEO Hugh Grant added, “Today’s announcement is a testament to everything we’ve achieved and the value that we have created for our stakeholders at Monsanto. We believe that this combination with Bayer represents the most compelling value for our shareowners, with the most certainty through the all-cash consideration.”

Commenting on the agreement, John Colley, a Professor of Practice in the Strategy & International Business group who researches large takeovers at Warwick Business School said, "Apart from Monsanto's shareholders, who have hit the jackpot, this looks like a lose-lose bid. Bayer have been forced into paying too much and face major integration and competition authority risks.”

Prof Colley added, ”Bayer's hand was to some extent forced by recently agreed deals of ChemChina buying Swiss-based agrobusiness Syngenta for $44Bn cash rapidly followed by the all paper $130Bn merger of Dow Chemicals with Du Pont. Falling crop prices meant that demand and prices were declining for seeds and agricultural chemicals such as herbicides and pesticides. The industry is responding to adversity with a series of mergers which are expected to have three main benefits: cost reduction, less competition, and growth.”

Talks between the companies attracted condemnation earlier in the year from environment groups and the Social Democrats, junior partner in Germany’s coalition government. Prof Colley said, “Reputational concerns also become an issue for Bayer with the GM foods campaign. EU and US competition authorities will make significant demands in terms of requiring disposals and imposing trade restrictions."

He added, "By the time the competition authorities have finished with their demands Bayer may regret setting a German record. The farmers will lose out as product ranges are rationalised and attempts are made to increase prices. Bayer may have won the bid now, but could regret the move at their leisure. Bayer CEO Werner Baumann may be cursing his luck. Bayer's shareholders may be cursing him.”