Deere responds to DOJ lawsuit

Deere and DOJ currently engaged in discovery phase of the antitrust suit.

The U.S. Department of Justice filed a civil antitrust lawsuit Aug. 31 seeking to block Deere & Co.'s proposed acquisition of Precision Planting LLC from Monsanto Co., saying the deal would hinder competition in the market for high-speed precision planting systems in the U.S.

The DOJ Antitrust Division’s lawsuit alleges that the transaction would combine the only two significant U.S. providers of high-speed precision planting and deny farmers throughout the country the benefits of competition that has spurred innovation, improved quality and lowered prices. The department filed its lawsuit in the U.S. District Court for the Northern District of Illinois.

Despite the lawsuit, Deere has continued to pursue the acquisition and announced that it filed its response to the DOJ’s complaint Oct. 12.

One of the key points Deere made in the response is that the case is designed to protect a competitor, not competition. According to the company, DOJ initially cleared Deere’s acquisition of Precision Planting, but after a competitor to Deere protested, DOJ opened a new investigation and filed a lawsuit in an attempt to block the sale.

Rather than consider the competitive benefits, Deere said the plaintiff’s challenge “stems from a competitor’s fears of enhanced competition — not the best interests of the agricultural community.”

Deere also said it disagrees with DOJ defining high-speed precision planting as a distinct market from other planting equipment growers use.

The company said growers today are "increasingly focused on lowering their production costs per bushel of crop, and they do this by maximizing yields and managing costs. Planting speed is only one factor growers consider when looking for ways to lower their production costs.” Deere added that growers also look to a wide range of other available options to meet their own unique farming needs and optimize their yield throughout the entire crop production cycle.

It also suggested that the Deere/Precision Planting deal would create more choices for growers and increase access to technology.

“Ultimately, the transaction provides all growers with greater freedom of choice and more independent channels and options to buy Precision Planting components,” Deere noted. “The transaction will ensure even more robust competition to provide equipment, after-market components and other means to increase growers’ yields and lower costs.”

In short, Deere said the transaction will increase competition and promote consumer freedom by increasing the total number of market players.

“Restraining this vibrant competition and greater consumer choice in the narrow interest of a particular competitor is not in the public’s interest,” the company emphasized.

A company spokesperson said Deere and DOJ are currently engaged in the discovery phase of the suit, explaining, “During discovery, legal teams can request documents and information from the other side and involved parties to support their respective cases. Depositions are also taken in the discovery phase.”

A trial date has been set for Feb. 27, 2017, in the U.S. District Court for the Northern District of Illinois, although cases like this sometimes may be settled before a trial is reached.

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