By Ludwig Burger and Arno Schuetze
(Reuters) - Shares of Monsanto Co (N:MON) rallied as much as 12 percent on Thursday on new reports that Bayer AG (DE:BAYGn) and BASF SE (DE:BASFn) were interested in acquiring the world's largest seed producer, highlighting the drive for further consolidation in the sector.
Both Bayer and BASF have been exploring a combination with Monsanto for several months, but valuation concerns have made a deal elusive, people familiar with the matter told Reuters on condition of anonymity.
Bloomberg News reported on Thursday that Bayer was exploring a bid for Monsanto, while financial news website Street Insider reported that BASF was also looking at a Monsanto acquisition.
Monsanto, Bayer and BASF all declined to comment.
Monsanto shares rose as high as $100.85 (70 pounds) before easing to $98.64, up 9.2 percent, giving it a market capitalization of about $44 billion. Bayer shares were down 4.5 percent while BASF shed 1 percent.
High inventories and low prices for agricultural commodities have pressured the industry to consolidate.
ChemChina agreed in February to acquire Switzerland's Syngenta AG (S:SYNN) for $43 billion, while Dow Chemical Co (N:DOW) and DuPont (N:DD) inked a deal to combine into a $130 billion company in December. Monsanto made a bid for Syngenta last year.
Monsanto has long argued it needs to buy or team up with a large crop chemicals maker as farmers increasingly look for one-stop shopping for seeds, pesticides and digital services such as satellite-guided spraying and harvesting.
Citing sources, Reuters reported in March that Monsanto had approached Bayer to express interest in its crop science unit, including a potential acquisition worth more than $30 billion.
Bayer is the second biggest player in crop chemicals, with an 18 percent market share, just behind Syngenta, which has a 19 percent share. Monsanto is a leader in seeds, with a 26 percent market share, followed by DuPont, with 21 percent.