Canadian Manufacturing

Deere, Monsanto contest ruling after DOJ looks to block planting business tie-up

U.S. Dept. of Justice sues to block acquisition, saying deal would stifle competition in U.S. farming market


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Deere has made efforts to cut costs as the market for equipment has slowed. PHOTO: Radosław Drożdżewski, via Wikimedia Commons

The DOJ said Deere and Precision Planting would account for 86 per cent of the planting market. PHOTO: Radosław Drożdżewski, via Wikimedia Commons

MOLINE, Ill.—Deere & Co. and the planting and digital agriculture wing of Monsanto Co. are planning to contest a U.S. Department of Justice (DOJ) lawsuit aimed at blocking Deere’s purchase of Monsanto’s planting equipment business.

The two companies announced the planned tie-up last November, but will now have to prove the acquisition of Precision Planting LLC will not stifle competition.

The DOJ announced its intention to halt the accord Aug. 31, saying it would hinder competition.

“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,” Renata Hesse, Acting Assistant Attorney General, said.

Deere sold approximately US$900 million in planters in 2015, while Precision Planting sold approximately $100 million. Together, the DOJ said the companies “conservatively” account for at least 86 per cent of the market.

Meanwhile, Deere and Monsanto said the DOJ allegations about the deal are “misguided” and the companies plan to defend the agreement “vigorously.”

“Competition in precision agriculture is strong and growing in all of these channels as companies around the world continue developing new technologies,” the firms said in a joint statement. “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.”


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