Justice department files antitrust lawsuit against John Deere, Monsanto

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Deere Precision Planting logos

WASHINGTON —The U.S. Department of Justice filed a civil antitrust lawsuit Aug. 31 seeking to block Deere & Company’s proposed acquisition of Precision Planting LLC from Monsanto Company.

The DOJ Antitrust Division’s lawsuit alleges the transaction would combine the only two significant U.S. providers of high-speed precision planting systems — technology that is designed to allow farmers to plant crops accurately at higher speeds.

The department filed its lawsuit in the U.S. District Court for the Northern District of Illinois.

In November, Deere and The Climate Corporation, a subsidiary of Monsanto Company, announced they had signed a definitive agreement for Deere to acquire the Precision Planting LLC equipment business.

“Precision Planting has been a key innovator in high-speed precision planting and Deere’s only significant competitor in developing and selling these technologies,” said Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division. “If this deal were allowed to proceed, Deere would dominate the market for high-speed precision planting systems and be able to raise prices and slow innovation at the expense of American farmers who rely on these systems.”

High-speed precision planting is an innovative technology that enables farmers to plant corn, soybeans and other row crops at up to twice the speed of a conventional planter without sacrificing accuracy. Planting at higher speeds can be highly valuable to farmers, many of whom have a limited window each year to plant their crops to achieve the highest crop yields.

According to the department’s complaint, Deere and Precision Planting are the only two effective competitors in high-speed precision planting, conservatively accounting for at least 86 percent of the market.

Deere and Precision Planting both introduced their respective high-speed planting systems in 2014, after years of research and development. The complaint details how the intense head-to-head competition between Deere and Precision Planting since that time has directly benefited farmers through aggressive discounts and promotions, lower prices and innovative product offerings.

The complaint alleges that Deere’s proposed acquisition of the company it has described as its “number one competitor” would allow it to control nearly every method through which American farmers can acquire effective high-speed precision planting systems and provide it with the ability to set prices, output, quality and product features without the constraints of market competition.

Deere will fight

Both defendants say they plan to contest the DOJ’s effort to block the Precision Planting acquisition. In a statement Aug. 31, Deere & Company and The Climate Corporation said they both cooperated fully with DOJ’s antitrust review following their late 2015 announcement regarding the purchase.

The official statement said DOJ’s allegations about the competitive impacts of the transaction “are misguided and the companies intend to defend the transaction vigorously against those allegations.”

The two companies claim the proposed acquisition “benefits farmers by accelerating the development and delivery of new precision equipment solutions that help farmers increase yield and productivity.

“Competition in precision agriculture is strong and growing in all of these channels as companies around the world continue developing new technologies. The acquisition will enable broader access to these advancements by ensuring farmers the choice to either buy new machinery or retrofit older planting equipment with the latest new innovations.”

If the transaction is finalized, Deere has said it preserve Precision Planting’s independence.

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1 COMMENT

  1. Crooked Deere in bed with Monsanto seed wrecker. This is why I won’t buy a Deere. They only
    want to charge the farmer more and more for new update equipment they will push you into if
    you own their crap.

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