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German chemicals giant Bayer has confirmed its record-breaking $66bn takeover of GM seeds business Monsanto - a deal that would create the world's biggest seeds and pesticides company.

, values Monsanto shares at $128 and will create a 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.

The use of such seeds is widespread in the US, but plans to introduce these into Europe have prompted fierce protests by environmental activists.

Bayer said feeding the world's population, which is expected to rise by around a third by 2050, was a massive challenge.

Werner Baumann, chief executive of Bayer, said the takeover would bring benefits across the board and deliver "substantial value to shareholders, our customers, employees and society at large".

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.

Falling crop prices have seen farmers cutting back on buying seeds and agricultural chemicals, such as herbicides and pesticides, leading to lower profits for suppliers.

The industry has been fighting back in order to save business costs.

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 is likely itself to attract 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.

Professor John Colley of Warwick Business School said: "Bayer's acquisition of 'Frankenstein' crop producer Monsanto could be a horror story for both Bayer and its customers: the farmers."

He said there were a number of worrying issues: "The farmers will lose out as product ranges are rationalised and attempts are made to increase prices.

"Clearly Bayer will realise cost savings from the acquisition, but they have had to pay an enormous price for Monsanto at a 45% premium to the previously undisturbed share price."

There is a $2bn break fee if the deal does not complete.

Bayer shares are 3% higher in Frankfurt. Monsanto shares were up 1.6% ahead of the US market open.