German drugmaker Bayer sweetened its bid to acquire Monsanto, the US agricultural seed producer, to just under $130 a share, according to a report in the Financial Times.
The deal would value Monsanto at $66 billion (£49.9 billion), including debt, and be the biggest of 2016.
It would also be a substantial mark-up on Bayer's first bid of $122 a share earlier this year.
Monsanto in May rejected Bayer's first offer, saying "the current proposal significantly undervalues our company and also does not adequately address or provide reassurance for some of the potential financing and regulatory execution risks related to the acquisition."
Bayer said it since held private talks with the company and has "comprehensively addressed Monsanto's questions concerning financing and regulatory matters and is prepared to make certain commitments to regulators."
It said it is willing to pay Monsanto $1.5 billion if the deal is blocked on antitrust grounds.
Bayer then raised its bid to $125 a share, which was also knocked back. The German drugmaker said it would be prepared to offer $127.50 only in connection with a negotiated deal.
Global agrochemicals companies are racing to consolidate, partly in response to a drop in commodity prices that has hit farm incomes.