In a statement, Bayer said it was in "advanced negotiations with Monsanto" over the acquisition. While the details have not been thrashed out, Bayer said it would offer $127.50 a share to take over the US seed group.
Bayer's initial offer of $122 per share was dismissed by Monsanto; the US group described the bid as "financially inadequate".
When the Germans came back with an improved bid of $125 per share, it still wasn't good enough. Monsanto again described the Germans' efforts as "financially inadequate and insufficient".
But it appears Monsanto may have been satisfied at long last. The group confirmed it has been "engaged in constructive negotiations with Bayer".
The merger would form the biggest agricultural supplier in the world, which would be market-leading across the US, Europe and in Asia.
It's a busy period for big chemical deals; Dow Chemical and DuPont are examining a merger by the end of 2016, and ChemChina is completing its takeover of Swiss company Syngenta.