Nathan Bomey

USA TODAY

Germany-based health and agricultural giant Bayer reached a deal to acquire seed and pesticide firm Monsanto for $66 billion in yet another jolt to a global agricultural sector that has been rocked by sluggish crop prices.

Bayer said Wednesday that it agreed to pay $128 per share in cash for St. Louis-based Monsanto after months of acquisition talks in which the pursuer sweetened its bid on multiple occasions.

Following a flurry of major deals in the ag sector, such as the tie-up of Dow Chemical and DuPont, regulatory scrutiny from the Obama administration and other governments could prove to be an obstacle for the Bayer-Monsanto accord.

But Bayer agreed to pay a $2 billion breakup fee if the deal collapses under antitrust pressure. Bayer, which is financing the deal with a combination of its cash reserves and new debt, described the fee as reflective of "its confidence that it will obtain the necessary regulatory approvals."

Monsanto shares (MON) rose 0.6% to close at $107.76, falling well short of the deal price, possibly reflecting skepticism that the deal will be finalized.

The companies said they expect the deal to close by the end of 2017.

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Their accord comes as Dow, a competitor in the agribusiness sector, is trying to win regulatory approval for its merger with DuPont. It also comes after ChemChina recently won approval from a key U.S. oversight committee for its acquisition of Swiss agricultural giant Syngenta.

Taken together, the wave of consolidation marks a direct response to sinking crop prices, which have undermined farmer profits and dented demand for ag suppliers. The U.S. Agriculture Department's July Prices Received Index fell 10 percentage points, compared with a year earlier, to 89.9% as products such as corn, wheat and oranges suffered.

Bayer CEO Werner Baumann said in a conference call that the deal reflects "a powerful response to the enormous challenges facing farmers and the ag industry overall," including global population growth and corresponding food demand.

Monsanto CEO Hugh Grant lauded the deal as "a momentous development" that "secures our vision to provide growers with sustainable solutions necessary to meet the agricultural demands of today and tomorrow."

Consumer advocates have voiced opposition against the merger, blasting the companies' environmental records and citing concerns about the impact on food prices.

"Once the deal goes ahead it could spell disaster for our food supply and farmers, ushering in a new era of sterile crops soaked in dangerous pesticides," global consumer advocacy group SumOfUs said in a petition to stop the deal that was launched after negotiations were revealed. "If the deal is successful, it'll make the new corporation the biggest seed maker and pesticide company in the world — and it will have almost total control of the most important aspects of our food supply."

Antitrust scrutiny is likely to center on how much overlap exists between the companies' products and whether the deal would concentrate control of those products with a small number of corporations. In a call with reporters, executives declined to specify where they believe overlap exists.

In crop protection products, Monsanto and Bayer collectively held market share of 24.8% in 2015, according to research firm IBISWorld.

Monsanto holds 36.7% market share in corn seeds and 29.5% in soybean seeds, according to 2015 figures compiled by agribusiness consultancy Verdant Partners.

"If the deals go through between Dow/DuPont and Syngenta/ChemChina, a greater percentage of the seed market would shift to fewer hands," Verdant said in a recent report. "Farmers and seed dealers question whether these large-scale mergers will benefit them, or cause them headaches."

David Balto, a former Federal Trade Commission policy director and a consumer advocate, said there's a "strong chance" that the Department of Justice will sue to block the deal, especially considering its past investigation into Monsanto's potentially anti-competitive actions, which concluded without action.

What's more, "the record of mergers in these industries is poor at best," Balto said in an email. "The mergers result in few benefits for consumers. And DOJ is increasingly skeptical of the types of 'regulatory remedies' that would be required to solve competitive problems."

In 2015, the companies had combined agricultural revenue of 23 billion euros. They said they expect to save $1.5 billion in "synergies" within three years — a corporate term that typically includes cost costs and combined purchasing power.

The combined company's seeds division and North American headquarters will be based in St. Louis. Its pesticide and crop science division will be based in Monheim, Germany. The company said it will also have "an important presence" in Durham, N.C., a digital farming business headquartered in San Francisco and many other operations.

Bayer said it's too early to say whether job cuts will occur.

"Based on our preliminary analysis, and given the complementarity of the portfolios and geographic focus of both companies, we expect to maintain major sites in the U.S., as well as in Germany," Bayer said.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.