US takes shot at Deere

The Justice Department filed a lawsuit Wednesday aimed at stopping Deere & Co. from buying Monsanto’s Precision Planting farm-equipment business. Deere said it would fight the suit, calling antitrust concerns “misguided.”

Monsanto had said in November that it would sell to Deere the unit that makes components of precision planters. Precision Planting also sells its technology to retrofit older planters and to other planter manufacturers. Deere has its own precision-planting technology.

The US said the deal would mean higher prices for farmers who want to buy equipment for high-speed precision planting, which allows farmers to plant row crops up to twice as fast as with conventional machinery. In February, Deere completed its acquisition of Monosem, which also makes precision planters.

A massive Deere ExactEmerge planter sells for about $150,000, which includes components for precision farming, while a Precision Planting retrofit kit costs about $30,000, JPMorgan analyst Ann Duignan estimated in a research note.

In particular, the Justice Department was concerned about Deere selling both the big machine planters themselves as well as the technology to make the big machines.

“By offering farmers high-speed precisionplanting retrofit kit sat a fraction of the cost of a new planter, Precision Planting posed a formidable challenge to Deere and its profitable sales of new planters,” the Justice Department said in its complaint.

Deere shares closed down 1.4 percent, at $84.55. Monsanto dropped just shy of 1 percent, at $106.50.