DOJ says cancellation a "victory for American farmers and consumers."

Krissa Welshans 1, Feedstuffs Editor

May 2, 2017

3 Min Read
Monsanto calls off Precision Planting sale to Deere
swisshippo/iStock/Thinkstock

The Climate Corp., a subsidiary of Monsanto Co., announced May 1 Monsanto’s termination of an agreement with Deere & Co., the largest manufacturer of planting equipment in the U.S., for the acquisition of its Precision Planting equipment business. The agreement was announced in November 2015, but closing has been delayed by U.S. Department of Justice (DOJ) concerns that the transaction would create a precision planting monopoly.

Climate made the strategic decision nearly 18 months ago to focus its business exclusively on its digital agriculture platform, and the company said in making its announcement that this strategy has not changed. The company intends to sell Precision Planting LLC and has spoken with several third parties that have expressed interest in purchasing it.

"We are deeply disappointed in this outcome as we remain confident the acquisition would have benefited customers," said John May, John Deere president of Agricultural Solutions and chief information officer.

DOJ filed suit on Aug. 31, 2016, to block the acquisition, alleging that the transaction was a merger-to-monopoly in high-speed precision planting systems. The case was scheduled for trial in U.S. District Court in Chicago, Ill., on June 5, 2017.

"The companies' decision to abandon this transaction is a victory for American farmers and consumers," said acting assistant attorney general Andrew Finch with the DOJ Antitrust Division. "Had this acquisition gone forward, significant head-to-head competition between Deere and Monsanto's Precision Planting - competition that has led to lower prices and more innovative products - would have been lost.”

Finch added, "Agriculture is one of the most important sectors of our economy, and the Antitrust Division will remain vigilant to ensure that competition in agriculture markets is not thwarted through illegal transactions."

While DOJ said the acquisition would have combined the only two significant U.S. providers of high-speed precision planting systems, Deere and Monsanto said they were prepared to present their case for approval of the acquisition later this year.

"With an opportunity to see this to conclusion, we believe it would have been clear the challenge to the transaction was based on flawed assessments of the marketplace,” May said.

Two agreements related to Deere's purchase of Precision Planting will also be terminated, including the digital collaboration agreement between Deere and Climate. Also ending is an agreement that would have allowed Ag Leader to expand access to and distribution of certain Precision Planting products and technologies.

"As a world leader in precision agriculture, John Deere will continue developing technology-based products and services to help customers improve the productivity and profitability of their operations," May said.

He added that Deere will remain focused on enabling customers to efficiently leverage their data to drive better decisions on their farms through the John Deere Operations Center, which includes nearly 75 connected software tools, with the total continuing to increase.

Climate said it remains committed to enabling seamless field data collection from multiple equipment types and software systems into its Climate FieldView digital agriculture platform. Easily getting farmers' data into one platform is essential for helping them get valuable insights from their field data to support the important agronomic decisions they make through the year, the company said.

Today, the Climate FieldView platform is the most connected in the industry. The company said it has sold more than 10,000 Climate FieldView Drive devices that stream real-time data from planters, sprayers and combines, with more than 70% of FieldView Drive data streaming from John Deere planters and combines today. Climate FieldView also will retain connectivity with Precision Planting’s industry-leading 20/20 SeedSense monitor, regardless of the planned sale of the business. In addition to equipment connectivity, Climate has agreements in place that enable data transfer from more than 80% of the top retailers across the Corn Belt into the Climate FieldView platform.

Beyond data collection, Climate FieldView provides data storage, digital maps that help farmers analyze seed performance and planting prescription and nitrogen monitoring tools to support the decisions farmers make every day to maximize their return on every acre.

About the Author(s)

Subscribe to Our Newsletters
Feedstuffs is the news source for animal agriculture

You May Also Like