Earlier this month, The Climate Corp., a subsidiary of Monsanto Co., announced it was terminating an agreement for Deere & Co. to acquire the Precision Planting business. The agreement was announced in November 2015, but closing had been delayed by a lawsuit from the Department of Justice.
An agreement for digital collaboration between Deere and The Climate Corp. will also be terminated, as well as an agreement that would have allowed Ag Leader to expand access to and distribution of certain Precision Planting products and technologies.
It appears that attorneys for Monsanto and Deere weren't getting a lot of traction in the case to justify the acquisition. Another factor that may have contributed to the termination is that Monsanto is busy working to complete Bayer's acquisition of the company. Click here to learn more about why the deal likely fell through.
The Climate Corp. says it still intends to sell the Precision Planting equipment business and has spoken with several third parties that have expressed interest in purchasing it. Ag attorney Todd Janzen says he would expect AGCO, CNH or Kinze to be the most likely purchasers of Precision Planting because they have established planting lines and distribution networks that could easily incorporate Precision Planting technologies.
“Kubota’s acquisition of Great Plains last year suggests that a foreign company could also be a suitor, looking for greater access to U.S. farm customers,” he says. “There are a number of foreign ag equipment manufacturers that would probably love this opportunity.”
Deere’s competitors in the planting market benefit from this termination, Janzen adds, which may benefit growers.
“Hopefully for farmers, this leads to more innovation and development of new planting technologies,” he says.
Originally posted May 2, 2017
No-tillers are probably not losing sleep over this decision. When the acquisition was first announced in 2015, No-Till Farmer surveyed readers for their reaction to the news, particularly in regards to concerns about the collection of farm data.
“Results indicated that no-tillers were concerned with how Deere would make use of on-farm data for marketing and equipment purposes, but also that info could be passed along to local dealers,” No-Till Farmer editor Frank Lessiter wrote in his February 2016 Frank Comments column.
The survey found that:
• 77% of no-tillers said it was a major worry that their collected data would remain confidential
• 71% were nervous about sharing their data with chemical, seed and equipment companies
• 73% percent were concerned that the electronic data could be shared without their permission with Deere and its dealers.
Lessiter also mentioned that “a number of no-tillers don’t feel Deere will be motivated to continue to develop aftermarket products that are compatible with other brands — at least not at an affordable price.”
But not all growers disapproved with the acquisition.
“I feel better with Deere owning them than I did with Monsanto owning them,” one survey taker said. Another commented that their data “is a whole lot more secure with Deere than it ever would have been with Monsanto.”
We’d like to know — what do you think about the termination of this acquisition? Are you concerned about another company acquiring Precision Planting? Take this brief survey and share your thoughts.
