The German drug and chemical company Bayer AG is making an offer to buy the US agricultural giant Monsanto for an undisclosed sum.  If the deal is allowed to go through, it would create world's biggest supplier of seeds and pesticides - but there are some hurdles to clear first.

US and European Union regulators may not be in a hurry to approve such a deal, because of recent mergers in the chemical sector.  DuPont and Dow Chemical reached a deal to come together and then split the new entity into three new companies focused on agriculture, materials, and specialty products.  Also, the state-owned China National Chemical Corporation, or ChemChina, agreed to acquire Swiss pesticide and seed company Syngenta AG.

If all three mergers were to be approved, it would put 83 percent of US corn seed sales and 70 percent of the global pesticide market under the control of the three consolidating companies.  And that's raising fears from the agricultural sector at a time when farmers face heavy pressure after three years of sliding crop prices.

"There will almost certainly be much less competition in the marketplace, and as a direct result of that farmers will end up paying higher prices than they otherwise would be paying," said Roger Johnson, president of the US agriculture lobbying group National Farmers Union.

Bayer has a market value of about US$90 Billion, making it the second-largest producer of crop chemicals after Syngenta.  Monsanto is worth US$42 Billion.