U.S. agrochemical firm Monsanto Co. has not given up on a proposed takeover of Swiss rival Syngenta, a source close to Monsanto said Friday after its $45 billion offer was rejected.

The St. Louis-based company is still working on the deal and could decide to increase its initial bid, which valued the firm at 449 Swiss francs a share, a 36 percent premium to Thursday's closing price.

A deal would give Monsanto, which dominates the market for seeds and genetically modified crops, access to lucrative crop protection chemicals and create an industry behemoth with combined sales of more than $31 billion.

Syngenta has about 350 employees in Minnesota, most of them in administrative offices in ­Minnetonka, spokesman Paul Minehart said.

Syngenta rebuffed the cash-and-shares offer, saying it undervalued its prospects and did not fully take into account regulatory risks.

But the Swiss firm does not consider the deal dead, according to another source, who is familiar with Syngenta.

Monsanto, which earlier confirmed it had made an offer, declined to comment on whether it would improve the bid.

A spokesman for Syngenta declined to comment.

Meanwhile, major investors in Syngenta told Reuters that they were confident a deal with ­Monsanto would come off if the U.S. firm upped its initial $45 ­billion bid by at least 10 percent.

"Monsanto is likely to come back relatively soon, and not with a modest price," said a third source, a banker who has worked with the U.S. company in the past.

Monsanto may need to pay a premium of up to 40 percent to Syngenta's shareholders to make the deal attractive, the banker said.

To ease antitrust concerns, it also may team up with an industry partner to acquire Syngenta's U.S. seeds business; the two groups are already seen as market leaders in the American seeds industry, according to the first source close to Monsanto.

Staff writer Tom Meersman contributed to this report.