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Monsanto Terminates Precision Planting Acquisition With Deere
Nearly two years after it initially agreed to sell Precision Planting to John Deere, Monsanto has announced it is terminating the 2015 agreement.
“We made the strategic decision nearly 18 months ago to focus our business exclusively on our digital agriculture platform, Climate FieldView,” says Mike Stern, chief executive officer of The Climate Corporation, a subsidiary of Monsanto Company. “The delay in closing due to the Department of Justice concerns is what ultimately drove our decision to terminate our agreement to sell Precision Planting to John Deere.”
In 2016, the U.S. Department of Justice brought legal action against Deere & Co. to block the transaction. In summary, the initial claim stated that if Deere were allowed to purchase Precision Planting, it would create a monopoly in the high-speed precision planting market.
Even though Deere and Monsanto were prepared to present their case for approval of the acquisition later this year, Stern says it had to make the hard call that it just didn’t see a clear path going forward.
“We are deeply disappointed in this outcome as we remain confident the acquisition would have benefited customers,” says John May, president, agricultural solutions and chief information officer for John Deere.
He adds that, “John Deere will continue developing technology-based products and services to help customers improve the productivity and profitability of their operations.”
Two Other Agreements off the Table
“We had another agreement with John Deere called the digital connectivity agreement,” says Stern. “While we would have liked to continue that relationship, John Deere chose to terminate that agreement.”
Ultimately, it won’t have any effect on their business going forward nor will it have any effect on customers.
“When this agreement began, we had just launched FieldView drive, which is a device that plugs into the cab of a tractor, sprayer, or harvester and allows data to flow directly from the implement into a grower’s FieldView account,” he explains. “Today, we have sold 10,000 of those drives in the U.S. alone – 70% of the data streaming from those drives is coming from Deere equipment. Any customer connected to a Deere WDS will still have that connection.”
Also ending is an agreement that would have allowed Iowa-based Ag Leader Technology to expand access to and distribution of specific Precision Planting products and technologies.
Looking for Another Partner
Stern says the company still intends to sell the Precision Planting business.
“We have an asset that is valuable, and the business is growing,” he says. “We have already been in conversations with several third parties who have expressed interest in purchasing Precision Planting. Any deal we make will most likely still need to get some element of regulatory approval in the U.S., and potentially, whoever the partner is, in other areas. Going forward we will try to find a partner that we believe will give us a much higher probability of being able to consummate a deal.”