John Deere and Precision Planting Merger Ends Before It Begins

If you haven't heard from now, Monsanto has terminated its agreement to sell its Precision Planting division to John Deere.  Only those inside these companies really know what led to the end of this agreement, but the press releases help us piece together what happened.

Monsanto/Climate Corporation/Precision Planting said it was terminating the agreement:

The Climate Corporation made the strategic decision nearly 18 months ago to focus its business exclusively on its digital agriculture platform, and that strategy has not changed. The company intends to sell the Precision Planting equipment business and has spoken with several third parties that have expressed interest in purchasing it.

Read the Monsanto press release here. Monsanto Terminates Agreement for Sale of Precision Planting Equipment Business

John Deere Chief Information Officer John May said:  "We are deeply disappointed in this outcome as we remain confident the acquisition would have benefited customers." 

The Department of Justice issued its own press release, describing the outcome as Deere "abandoning" proposed acquisition:  

“The companies’ decision to abandon this transaction is a victory for American farmers and consumers,” said Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division. “Had this acquisition gone forward, significant head-to-head competition between Deere and Monsanto’s Precision Planting – competition that has led to lower prices and more innovative products – would have been lost. Agriculture is one of the most important sectors of our economy and the Antitrust Division will remain vigilant to ensure that competition in agriculture markets is not thwarted through illegal transactions.”

The proposed acquisition would have combined the only two significant U.S. providers of high-speed precision planting systems. Planting at higher speeds can be highly valuable to farmers, many of whom have a limited window each year to plant their crops to achieve the highest crop yields. As a result, high-speed precision planting technology is expected to become the industry standard in the coming years.

Clearly, the Department of Justice antitrust suit pressured Monsanto and Deere to abandon their attempts to sell Precision Planting. I can only conclude that, after evaluating their odds in the lawsuit, Deere and Monsanto determined that terminating the merger agreement was a better outcome to proceeding with their chances at trial.  Monsanto remains determined to sell Precision Planting, according to the press release, just not to Deere.

Even more interesting to me was that the "digital collaboration agreement" between Deere and Monsanto was also terminated. That means the end of sharing ag data between Climate Corporation's FieldView and Deere's Operation Center platforms, unless farmers voluntarily opt-in to making these integrations.

Was this a victory for farmers?  I am sure the forums will light up with farmers that have an opinion.  

For me, what is remarkable here is that digital collaboration agreement has also come to an end. This was never part of the DOJ's lawsuit against Deere and Monsanto--receiving only a brief casual mention in the DOJ's complaint. As I wrote in an editorial last year, ag data sharing was the real issue, not the high speed planting technology. I can't help but wonder whether the DOJ also made ag data sharing an issue, leading to this result.