Oct 13 Deere & Co said its proposal to
buy Precision Planting, an agricultural equipment and technology
company, will increase consumer choice and directly benefit
growers, in a response filed on Wednesday to the U.S. Department
of Justice's lawsuit to block the acquisition.
Deere announced its planned acquisition of Precision
Planting in November 2015, for about $190 million. Precision
Planting's parent is The Climate Corporation, which is a unit of
In August, the Justice Department said the proposed deal
would mean higher prices for high-speed precision planting
equipment, which allows farmers to plant row crops, such as
corn, up to twice as fast as with conventional machinery.
In its response, Deere challenged the Justice Department's
definition of "high-speed precision planting system," saying it
was vague and ambiguous. Deere also denied "that there is any
meaningful economic market consisting of 'high-speed precision
The Justice Department declined to comment on Thursday.
Deere said the Justice Department initially cleared its
proposed acquisition in October 2015 in compliance with the
Federal Trade Commission's Hart-Scott-Rodino Act. Clearance is
separate from actual approval of a deal.
Following a protest by an unnamed Deere competitor, the
Justice Department opened a new investigation and later filed a
lawsuit in August 2016 to block the transaction, Deere spokesman
Ken Golden said, referring to legal documents the company filed
"It is our position that this case is designed to protect a
competitor, not competition," Golden said.
Both Deere and the Justice Department declined to name the
CNH Industrial and AGCO Corp are Deere competitors
that have agreements to factory install Precision Planting
equipment on their new planters. Precision Planting equipment
and technology can also be retrofit on older planters
manufactured by Deere, Kinze Manufacturing, CNH Industrial and
Deere said the company's commitments to CNH Industrial and
AGCO, and its license grants, technology transfers are all "pro
Additionally, Deere entered into an agreement with Ag
Leader, an agricultural technology company, to manufacture and
sell Precision Planting products if the acquisition is
completed, as a possible remedy to the Justice Department's
Ag Leader will remain an independent competitor in the
precision agriculture industry, a statement on the company's
Deere's proposed deal is part of a wave of consolidation
among agriculture companies as they search for ways to cut costs
and improve profits in the face of a shrinking farm economy.
Seed and agrochemical producers Monsanto and Germany's Bayer AG
have agreed to merge, while ChemChina wants to buy
Syngenta AG in a $43 billion deal.
(Reporting by Meredith Davis in Chicago; Additional reporting
by Karl Plume; Editing by Leslie Adler)