German chemicals giant Bayer announced Wednesday a $66 billion deal to buy controversial US seeds and pesticides firm Monsanto, triggering immediate criticism from farmers and environmentalists.

After a months-long pursuit, Bayer said its US peer had accepted an improved offer of $128 per share for Monsanto in an all-cash transaction, avoiding the need to resort to a hostile takeover.

If completed, the 58.8-billion-euro deal would mark the largest-ever takeover by a German firm and would create one of the largest firms in the agribusiness sector.

"The combination with Monsanto represents the kind of revolutionary approach to agriculture that will be needed to sustainably feed the world," Bayer chief executive Werner Baumann told investors in a conference call.

But investors' reaction in the US, where Monsanto shares rose 0.6 percent but remained more than $21 below the deal price, suggested deep market doubts that the deal can pass financial and antitrust hurdles.

Bayer's share price initially leapt on news of the deal but fell back as the afternoon wore on, gaining 0.3 percent to 93.55 euros.

Meanwhile environmental groups geared up for a fight. In a nod to fierce opposition in Europe to Monsanto's use of genetically modified crops and its potent herbicide Roundup, Friends of the Earth labelled the tie-up a "marriage made in hell".

"This mega corporation will be doing its best to force damaging pesticides and GM seeds into our countryside," campaigner Adrian Bebb said in a statement.

The National Farmers Union in the US said the Bayer deal, along with other pending agricultural mergers, "are being made to benefit the corporate boardrooms at the expense of family farmers, ranchers, consumers and rural economies."

The group said it looked forward to making its case at a congressional hearing next week to be chaired by Senator Charles Grassley, who plans to press antitrust regulators to ensure that farmers benefit robust competition from suppliers. Grassley represents the farm-rich midwestern state of Iowa.

"Iowa farmers who I've spoken with are worried about rising input costs, especially in an increasingly weak agriculture economy," Grassley said in a statement. "Today's announcement will only heighten those concerns."

The deal is expected to be completed by the end of 2017, Bayer said, though it still requires shareholder and regulatory approval.

Baumann said that he had already "received encouraging feedback" from regulatory agencies.

"There is very little overlap" between the two companies that might concern regulators, Monsanto CEO Hugh Grant told investors on Wednesday. "I think it's a very clean deal."

But the Bayer-Monsanto tie-up comes in the wake of two other proposed mega-mergers involving US companies DuPont and Dow Chemical, and Swiss company Syngenta and ChemChina.

They also come as low crop prices take a toll on farmer incomes in many countries.

German Green Party MEP Martin Haeusling insisted that "it's up to German regulators and European competition commissioner Margrethe Vestager to stop Bayer from dominating the worldwide agrochemicals market."

- A long engagement -

Bayer -- best known as the company behind aspirin -- has been wooing Monsanto since late May, when it made an initial bid of $122 per share, valuing the crop giant at $62 billion.

Monsanto rejected that bid, but said it was "open" to further talks.

The 153-year-old German chemicals behemoth then raised its offer twice more but was rebuffed each time as Monsanto held out for more money.

Under its final bid, Bayer also offered to pay Monsanto a $2-billion fee in case the merger is rejected by US or European authorities.

"We do not like this transaction, because we think that Bayer is overpaying significantly," wrote analyst Peter Spengler of DZ bank on Wednesday before the deal was confirmed.

But Bayer said that it expects synergy savings from the merger will allow it to add $1.5 billion to its underlying profit as measured by EBITDA within three years.

Added together, Bayer and Monsanto booked sales of 23 billion euros in 2015.

- Cries of dismay -

As well as Monsanto's genetically modified crops, environmental campaigners in Europe are also highly critical of its best-selling weedkiller Roundup, whose active ingredient glyphosate is suspected of being a carcinogen.

In Europe, debate about glyphosate has reached Brussels, where EU member states in July voted to restrict its use by the bloc's farmers for 18 months.

The merged firm "will play a defining role in deciding which seeds and pesticides come onto the market," warned Greenpeace agriculture expert Dirk Zimmermann.