The Department of Justice (DOJ) announced this week that Deere & Company and Monsanto terminated Deere’s attempt to purchase Precision Planting LLC, a subsidiary of Monsanto Co.
The agreement was announced in November 2015, but closing was delayed by DOJ concerns that the transaction would create a precision planting monopoly.
The department filed suit in 2016 to block the acquisition, alleging that the transaction was a merger-to-monopoly in high-speed precision planting systems, an innovative technology that enables farmers to accurately plant row crops at up to twice the speed of a conventional planter. The case was scheduled for trial June 5, 2017 in U.S. District Court in Chicago.
“The companies’ decision to abandon this transaction is a victory for American farmers and consumers,” Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division said in a statement. “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.”
The DOJ said the proposed acquisition would have combined the only two significant U.S. providers of high-speed precision planting systems.
“We are deeply disappointed in the outcome as we remain confident the acquisition would have benefited customers,” John Deere President of Agricultural Solutions and Chief Information Officer John May said in a statement.
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 transition was based on flawed assessments of the marketplace,” May said.
Planting at higher speeds can be highly valuable to farmers, many of whom have a limited window each year to their crops to achieve the highest crop yields. As a result, high-speed precision planting technology is expected to become the industry standard in the coming years.
“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.