Monsanto, Deere digital unit deal halted – Manufacturing News

on May3

2 May 2017 | 6:01 pm

Monsanto has backed away from a deal to sell its precision planting unit to Deere, meaning the Moline maker of farm equipment will need to look for other ways to grow its digital agriculture business.

The sale, which the U.S. Justice Department challenged on antitrust grounds, was headed to court next month. In 2015, Deere agreed to buy the unit, which helps farmers plant seeds with more precise depth and spacing, from the agribusiness giant for $190 million—$20 million less than Monsanto paid for it three years earlier.

The Justice Department argued last year the deal would have allowed Deere to control the market for precision planting, raising prices for farmers. Though Deere believed the deal would not have proved anti-competitive, and “we were prepared to defend that position at trial,” said spokesman Ken Golden, “that’s not going to happen now.”

ReadmoreonDeere’sinnovationengine:Softwareforthesmartfarm

“We have equipment already that’s capable of doing what the equipment at (Precision Planting) is capable of doing, so we’re moving ahead with our precision agriculture initiative,” he said. “This deal is done and gone, and we’ll continue to pursue our competitive spot in the marketplace.”

Golden declined to comment on whether the company would continue to build out its own capabilities or seek out new acquisitions.

Consolidation in the digital agriculture space will likely continue unabated, said Decker Walker, a Chicago-based consultant with Boston Consulting Group. But the DOJ’s opposition to this deal may mean that companies will focus on buying businesses in an earlier stage of development. Precision Planting, based in Tremont, was founded almost a quarter-century ago and has an established customer base.

“This is a blip on the radar in a much bigger game,” he said.



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