Monsanto subsidiary The Climate Corp. has cancelled a deal to sell its Precision Planting business to Deere and Co., citing the months-long court fight against it.
The U.S. Department of Justice filed suit in August last year to block the proposed US$190 million deal, alleging the deal would lead to higher prices for high-speed precision planting equipment.
San Francisco-based Climate Corp. on Monday announced Monsanto’s “termination” of the deal, a sale which was first proposed in November 2015.
Closing the deal, the company said Monday, “has been delayed by Department of Justice concerns with the transaction.”
Two related agreements are also halted as a result of the cancelled deal, Deere said, including the ag equipment giant’s “Digital Ag Connectivity” agreement with Climate Corp.
Monsanto said Monday the end of that digital collaboration agreement will have “no impact” on current users of Climate Corp.’s Climate FieldView system who use Deere’s Wireless Data Server (WDS) to stream data into their account.
Climate Corp. had started selling the Climate FieldView system to producers in Eastern Canada last fall for use in the 2017 crop season. Beta testing recently began for a rollout in Western Canada toward year’s end.
A separate agreement last fall with precision ag equipment firm Ag Leader — which would have allowed the Iowa company to make and sell Precision’s SpeedTube line and related tech such as Precision’s vSet, vDrive and DeltaForce systems — is also cancelled, Deere said Monday.
The Ag Leader deal had been conditional on the closing of Precision Planting’s sale to Deere.
“We are deeply disappointed in this outcome as we remain confident the acquisition would have benefited customers,” John May, Deere’s president for agricultural solutions, said Monday in a separate release.
Deere and Monsanto had planned to present their case for approval of the acquisition later this year, the ag equipment firm said.
“With an opportunity to see this to conclusion, we believe it would have been clear the challenge to the transaction was based on flawed assessments of the marketplace,” May said.
A Deere spokesperson last fall told the Reuters news service the DOJ’s antitrust suit followed a protest by an unnamed Deere competitor.
Deere’s position, the spokesperson said, is that the suit was “designed to protect a competitor, not competition.”
U.S. acting assistant Attorney General Andrew Finch, in a release Monday from the justice department’s antitrust division, described the companies’ decision to scrap the deal as “a victory for American farmers and consumers.”
If the deal had gone ahead, he said, “significant head-to-head competition” between Deere and Precision Planting “would have been lost,” as a sale would have combined “the only two significant U.S. providers” of high-speed precision planting systems.
Climate Corp. said Monday it made the strategic decision in 2015 to focus its business “exclusively” on its digital ag platform and that strategy “has not changed.”
Climate still aims to sell the Precision Planting equipment business and has “spoken with several third parties that have expressed interest in purchasing it,” the company added Monday.
For its part, Deere said Monday it “will remain focused on enabling customers to efficiently leverage their data to drive better decisions on their farms through the John Deere Operations Center.” — AGCanada.com Network