Justice Department sues to block Deere's acquisition of Precision Planting
Staff Writer | August 31, 2016
The Department of Justice filed a civil antitrust lawsuit seeking to block Deere & Company's proposed acquisition of Precision Planting from Monsanto Company.
The Department says it wants to preserve competition in the market for high-speed precision planting systems in the United States.
The Antitrust Division's lawsuit alleges that the transaction would combine the only two significant U.S. providers of high-speed precision planting systems – technology that is designed to allow farmers to plant crops accurately at higher speeds.
The acquisition would 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.
High-speed precision planting is an innovative technology that enables farmers to plant corn, soybeans and other row crops at up to twice the speed of a conventional planter without sacrificing accuracy.
Planting at higher speeds can be highly valuable to farmers, many of whom have a limited window each year to plant their crops to achieve the highest crop yields.
As a result, Deere and Precision Planting view high-speed precision planting as "revolutionary technology" that represents a "True Gamechanger for Agriculture" and expect it to become the industry standard in the coming years.
According to the department's complaint, Deere and Precision Planting are the only two effective competitors in high-speed precision planting, conservatively accounting for at least 86 percent of the market.
Deere and Precision Planting both introduced their respective high-speed planting systems in 2014, after years of research and development. The complaint details how the intense head-to-head competition between Deere and Precision Planting since that time has directly benefitted farmers through aggressive discounts and promotions, lower prices and innovative product offerings.
The complaint alleges that Deere's proposed acquisition of the company it has described as its "number one competitor" would allow it to control nearly every method through which American farmers can acquire effective high-speed precision planting systems and provide it with the ability to set prices, output, quality and product features without the constraints of market competition. ■
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