By Greg Hammond, J.D.
The U.S. Department of Justice Antitrust Division has asked the federal district court in Chicago to block Deere & Company’s proposed acquisition of Precision Planting LLC. If allowed, the merger would end competition in the market for high-speed precision planting systems in the United States, according to the Antitrust Division’s complaint (U.S. v. Deere & Company, Case 1:16-cv-08515).
Deere and Precision Planting have both introduced innovative high-speed precision planting systems that represent a "True Gamechanger for Agriculture," the Antitrust Division alleges. These systems allow farmers to plant seeds at substantially higher speeds than conventional planters, without sacrificing accuracy. Both companies allegedly remain dominant providers of high-speed precision planting systems in the United States, accounting for at least 86 percent of all U.S. sales.
If not enjoined, the Antitrust Division argues that Deere’s proposed acquisition of Precision Planting would end the competition that exists today between the two companies and the competition that would otherwise continue and expand as adoption of this emerging technology increases. Further, Deere would purportedly control nearly every method through which American farmers can acquire effective high-speed precision planting systems. Competition between Deere and Precision Planting benefits farmers through lower prices and more innovative high-speed precision planting systems in the marketplace, the Antitrust Division asserts. Consequently, the proposed deal likely would lessen competition substantially, and tend to create a monopoly, in the market for high-speed precision planting systems in the United States, in violation of Section 7 of the Clayton Act.
"High-speed precision planting technology holds out the promise of improved yields for American farmers by enabling them to plant crops more accurately at higher speeds," stated Acting Assistant Attorney General Renata Hesse of the Antitrust Division. "Precision Planting has been a key innovator in high-speed precision planting and Deere’s only significant competitor in developing and selling these technologies. 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."
Companies: Deere & Co.; Precision Planting LLC
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