Deere & Co. and The Climate Corp. said they plan to contest legal action announced today by the U.S. Department of Justice that seeks to block Deere's acquisition of Precision Planting.
Deere and Climate Corp., a subsidiary of Monsanto Co., announced last November that they had signed a definitive agreement for Deere to acquire the Precision Planting LLC equipment business, and the companies cooperated fully with the DOJ antitrust review.
DOJ's antitrust lawsuit alleges that the transaction would combine the only two significant U.S. providers of high-speed precision planting systems and deny farmers throughout the country the benefit 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.
“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,” Renata Hesse, acting assistant attorney general of the DOJ Antitrust Division, said. “Precision Planting has been a key innovator in high-speed precision planting and Deere’s only significant competitor in developing and selling these technologies. 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.”
Deere called the allegations “misguided” and said the companies intend to vigorously defend the transaction. “The proposed acquisition benefits farmers by accelerating the development and delivery of new precision equipment solutions that help farmers increase yield and productivity,” the company noted.
According to Deere, 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 have the choice to either buy new machinery or retrofit older planting equipment with the latest new innovations," Deere said. "When the transaction is finalized, Deere will preserve Precision Planting's independence in order to ensure innovation and speed to market and will invest in additional innovation efforts at Precision Planting to benefit customers.”