Bayer AG raised its offer for Monsanto Co. in a bid that values shares of the U.S. company at $54.7 billion after being rebuffed in its initial efforts to combine operations and become the world’s biggest supplier of farm chemicals and seeds.

The proposed price was increased to $125 a share in cash, and Leverkusen, Germany-based Bayer also offered paying a “reverse antitrust break fee” of $1.5 billion, according to a statement on Thursday. Monsanto’s equity had been valued at $53.4 billion under the initial terms of $122 a share. Its stock rose in New York trading.

The increased price may make a takeover more palatable for Monsanto shareholders while simultaneously stoking concerns among Bayer investors about the deepening financial strain on the German company. Buying Monsanto would give Bayer a controversial pioneer of crop biotechnology that is reviled in Europe.

Monsanto has revived talks with BASF SE about a possible combination of their agrochemicals businesses, people familiar with the matter said this week. The U.S. company is exploring various transactions, including the potential acquisition of BASF’s agriculture-solutions unit, the people said, asking not to be identified as the discussions are private. In return, Germany’s BASF would likely receive newly issued shares in Monsanto, the people said. Discussions are at an early stage, and no final decisions have been made as talks with Bayer are continuing, they said.

Shares of Monsanto climbed almost 3 percent to $104.145 in New York trading.

Bayer said it verbally raised its offer on July 1, and followed up with a proposal sent to Monsanto on July 9. The initial proposal valued Monsanto and its debt at $62 billion, and was rejected on May 24 as “incomplete and financially inadequate.”

A spokesman for Bayer refused to disclose the enterprise value of the latest bid.

Driving the potential deal is Bayer’s ambition to become the global leader in pharmaceuticals and chemicals for people, plants and animals. Though the negotiations were set in motion with talks on April 18 under his predecessor, Marijn Dekkers, Chief Executive Officer Werner Baumann is responsible for completing a transaction and then making it work.

The 152-year-old company, which trademarked the brand names “heroin” and “aspirin,” was founded by two friends who made dyes from coal-tar derivatives. Over the following decades, they expanded into other chemicals and pharmaceuticals, introducing heroin as a cough remedy in 1896 and then aspirin, the world’s first blockbuster drug, in 1899.