Deere Issues Statement on DOJ Lawsuit Blocking Precision Planting Deal
The agricultural industry will benefit from Deere’s acquisition of Precision Planting LLC (“Precision Planting”) through faster and better innovation focused on helping agricultural commodity growers increase crop yields and operate more efficiently. No competition will be lost as a result of the transaction. In fact, competition will intensify, according to a recent press release from Deere and Co.
Rather than consider these competitive benefits, Plaintiff’s challenge stems from a competitor’s fears of enhanced competition—not the best interests of the agricultural community. Tellingly, the Department of Justice, pursuant to procedures under the Hart-Scott-Rodino Act, long ago cleared this transaction to proceed, only to change its mind and bring this lawsuit when a Deere competitor protested. However, it is a fundamental maxim that antitrust laws are meant to protect competition, not competitors. Growers deserve the benefits of this transaction and the increased innovation, competition, and consumer choice that a combination of Deere and Precision Planting will create.
Precision Planting manufactures and sells component products that can be installed on growers’ existing equipment—including planters. These products are designed to help growers better execute their in-field jobs using the equipment they already own. Precision Planting’s agronomically focused and innovative team will boost Deere’s capacity to help growers across a wide range of crop production steps, beyond simply increasing planting speed.
Today’s grower is increasingly focused on lowering their production costs per bushel of crop, and they do this by maximizing yields and managing costs. Planting speed is only one factor growers consider when looking for ways to lower their production costs. Growers also look to a wide range of other available options to meet their own unique farming needs and optimize their yield throughout the entire crop production cycle; from planning their crop, preparing the soil, planting the seed, nurturing and protecting the plants, and harvesting. Deere’s core business is providing original equipment solutions addressing these in-field tasks. Combining the efforts of Deere and Precision Planting will drive innovation across all of these tasks to help growers more quickly lower their production costs and remain competitive in a global commodities market.
Deere also maintains a highly sophisticated dealer distribution channel. Together, Deere and its dealers have made advanced new capabilities available through local distribution networks that provide differentiated support and choices to growers in deciding which options will best help them lower their production costs. The transaction will increase the number of retail outlets where growers can purchase Precision Planting components by adding Deere’s dealer channel to Precision Planting’s existing network. This combination creates a unique opportunity to bring Precision Planting’s innovative components to more growers, in more geographies, more quickly, across a broader range of in-field jobs.
In addition to enhancing Deere’s innovation capabilities and portfolio to better serve growers, the transaction increases grower choice and creates value with Ag Leader Technology, Inc. (“Ag Leader”), a recognized innovator in the field of agricultural equipment. As part of the transaction, Ag Leader will gain the right to manufacture, sell, and even improve upon Precision Planting’s SpeedTube and other components. Ag Leader’s capabilities and extensive distribution network will ensure an additional independent and competitive channel for growers and OEM’s to purchase Precision Planting’s SpeedTube and other components, and Ag Leader’s track record of innovation will provide a new path for continued improvement in these Precision Planting products.
Post-transaction, Deere’s ExactEmerge planter technology will continue to provide growers seeking to buy new planters as well as those that own late-model Deere planters an opportunity to plant with greater precision at faster speeds. Meanwhile, Precision Planting’s products will continue to provide solutions for late-model as well as older Deere planters. And through both existing contractual commitments and Deere’s agreement with Ag Leader, Deere’s competitors and their customers will continue to have access to Precision Planting’s SpeedTube technology for their planters as well. Ultimately, the transaction provides all growers with greater freedom of choice and more independent channels and options to buy Precision Planting components. The transaction will ensure even more robust competition to provide equipment, aftermarket components, and other means to increase growers’ yields and lower costs. In short, the transaction will increase competition and promote consumer freedom by increasing the total number of market players. Restraining this vibrant competition and greater consumer choice in the narrow interest of a particular competitor is not in the public’s interest.