In November 2015, John Deere signed an agreement to acquire Precision Planting from Monsanto.
In August, the U.S. Department of Justice challenged the transaction, stating that the deal would bring together the largest manufacturers of high-speed planting technology. Deere replied that the Justice Department’s antitrust concerns were “misguided,” and that the company would fight the lawsuit.
Today, Deere announced that the company has reached an agreement with Ag Leader, which will allow the precision agriculture competitor to offer Precision Planting products. Ag Leader will remain a completely independent competitor to Deere and Precision Planting.
The agreement will provide Ag Leader the technologies and licenses needed to manufacture and sell SpeedTube, vSet, vDrive, and DeltaForce, once Deere’s acquisition of Precision Planting is complete. Ag Leader can sell these components to retrofit John Deere and other brands of planters.
Ag Leader will also provide a competitive source of supply for OEM manufacturers that equip their planters with Precision Planting components, which includes Case IH and AGCO.
In a press release today, Deere also noted how “the proposed acquisition would accelerate the development of new precision equipment solutions to help farmers improve productivity and increase yields to help feed a growing global population.” In addition, the Ag Leader agreement “enables Ag Leader to further develop these products and continue delivering innovative solutions for precision agriculture.”
Update: Deere responds to DOJ complaint
After Deere announced the agreement with Ag Leader, the company filed its response to the DOJ’s complaint.
These are Deere’s main points about why the acquisition should be completed:
- The DOJ’s case is designed to protect a competitor, not competition. Deere’s acquisition of Precision Planting was initially cleared until a competitor protested. This was when the DOJ opened a new investigation and filed a lawsuit to block the sale.
- Deere disagrees with the DOJ’s definition that high-speed planting is a distinct market from other planting equipment, as planting speed is only one factor growers look at.
- Deere believes the acquisition will increase customers’ choices to retrofit options. With Precision Planting’s offering added to Deere’s, there will be a wider range of planting and precision ag solutions available to more customers at more price points.
- Combining the efforts of Deere and Precision Planting will drive innovation, helping growers lower production costs.
- Ag Leader will have the right to sell and improve upon Precision Planting parts, ensuring an additional independent and competitive channel as well as another path for innovation.
Source: Jessie Scott, Agriculture.com
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