(Reuters) – German drugmaker Bayer AG said on Monday it was in advanced talks to acquire Monsanto Co and was raising its offer for the U.S. seed producer.

Bayer said it would be prepared to offer $127.50 per Monsanto share from its previous offer price of $125 per share only in connection with a negotiated deal.

German daily Rheinische Post earlier reported that a $130 per share offer may be necessary to clinch the deal “in a swift and friendly way”, citing unnamed sources at Bayer.

In July, Bayer raised its earlier offer of $122 per share to $125 per share to put Monsanto under pressure to engage further.

Monsanto had turned down Bayer’s offer to buy the company at $125 per share, but said it was open to further talks with the German healthcare and chemicals group as well as other parties.

Global agrochemicals companies are racing to consolidate, partly in response to a drop in commodity prices that has hit farm incomes. Bayer made its bid for Monsanto public in May, but the two companies have made little progress since in negotiating a deal.

(Reporting by Gayathree Ganesan in Bengaluru and Ludwig Burger in Frankfurt; Editing by Sandra Maler and Tom Brown)