Monsanto, the world's biggest seed company, said on Wednesday it had received an unsolicited proposal to be acquired by German drug and chemicals maker Bayer, as high inventories and low prices for agricultural commodities spur a drive to consolidate the sector.

Monsanto currently has a market capitalisation of $42 billion. It didn't disclose terms of the approach, but an acquisition would likely be bigger in value than a deal struck by ChemChina in February to buy Swiss agrochemicals and seeds company Syngenta for $43 billion - a target Monsanto itself pursued last year.

Monsanto’s board is reviewing the proposal, which is subject to due diligence, regulatory approvals and other conditions, the company said in a statement. There is no assurance that any transaction will take place, it said.

ChemChina’s deal for Syngenta is currently the subject of intensive regulatory review in the United States. Any deal between Bayer and Monsanto could raise US antitrust concerns because of the overlap in the seeds business, particularly in soybeans, cotton and canola, antitrust experts have said.

Germany-based Bayer, which has a market value of $90 billion, did not immediately respond to a request for comment.

In a sign of how sudden Bayer’s move was for Monsanto, the latter’s president and chief operating officer, Brett Begemann, dismissed speculation of the company being a takeover target for Bayer or German rival BASF at an investor conference in New York earlier on Wednesday.

“It’s all wild speculation because there’s nothing there,” he said.

Bayer is ranked No. 2 in crop chemicals, with an 18 per cent market share, according to industry data. The largest, Syngenta, has a 19 per cent share.

Monsanto is the leader in seeds, with a 26 per cent market share, followed by DuPont, with 21 per cent. DuPont agreed last year to merge with Dow Chemical. Reuters