Deere sued to stop Precision Planting deal
U.S. says sale would eliminate competition, cost farmers
The U.S. Justice Department filed a lawsuit on Wednesday aimed at stopping Deere & Co. from buying Monsanto Co’s Precision Planting farm equipment business.
Deere said in a statement that it would fight the lawsuit, saying that the Justice Department’s antitrust concerns were “misguided.”
Monsanto in November said it would sell its Precision Planting farm equipment business to Deere for an undisclosed sum. The Justice Department complaint asking the deal to be stopped puts the price at about $190 million.
The Justice Department said the proposed deal would eliminate competition and raise costs for farmers by combining the two biggest makers of high-speed precision planting.
Precision farming allows farmers to plant row crops like corn up to twice as fast as with conventional machinery.
In February, Deere completed its acquisition of Monosem, which also makes precision planters.
“High-speed precision planting technology holds out the promise of improved yields for American farmers by enabling them to plant crops more accurately at higher speeds,” said Renata Hesse, acting head of the Justice Department’s Antitrust Division in a news release.
“Precision Planting has been a key innovator in high-speed precision planting and Deere’s only significant competitor in developing and selling these technologies.”
In particular, the Justice Department is concerned about Deere selling new planters as well as a less expensive device sold by Precision Planting that converts conventional planters into precision planters.
“By offering farmers high-speed precision planting retrofit kits at a fraction of the cost of a new planter, Precision Planting posed a formidable challenge to Deere and its profitable sales of new planters,” the Justice Department said.