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Federal government opposes Monsanto-Deere deal

The Climate Corporation Logo
Provided by The Climate Corporation

The sale of a Monsanto unit's high-speed planting technology subsidiary is in jeopardy. The federal government has gone to court to block the deal. It contends the multi-million dollar sale would hinder competition and raise costs for farmers. The companies involved in the potential transaction are vowing to fight the claims.

The federal justice department’s antitrust unit has filed a lawsuit in Chicago to stop the sale of The Climate Corporation’s Precision Planting business to Deere & Co.

St. Louis-based Monsanto owns The Climate Corporation.

In the filing, justice department officials say the potential $190 million deal would give Deere & Co. roughly 90 percent of the U.S. high-speed technology planting market.

They contend keeping the companies separate would continue existing competition, which “benefits farmers through lower prices” and more innovation.

A combination would “tend to create a monopoly” in violation of antitrust regulations.

Deere & Co. and The Climate Corporation have issued a joint statement calling the federal claims “misguided” and they plan to fight attempts to derail the deal.

They contend farmers would benefit through accelerating technological advancements that could increase productivity.

The potential deal was announced last year and followed the trend of consolidation in the agricultural sector.

The biggest possible merger so far involves The Dow Chemical Co. and DuPont Co. That is an estimated $130 billion combination that would result in a company called DowDuPont.

Another major deal could close by the end of the year. ChemChina is acquiring Switzerland-based Syngenta. U.S. regulators recently signed off on the estimated $43 billion combination.

Syngenta had been a takeover target of Monsanto, but rejected offers from the St. Louis-based company.

Hugh Grant, CEO, Monsanto
Credit Provided by Monsanto
Grant has been involved in merger discussions with his high-level counterpart at Bayer.

That prompted Bayer to make its move. The German company has been involved in high-level talks to acquire Monsanto.

It’s most recent offer of $55 billion, or $125-a-share, has been rejected. Monsanto has described it as “financially inadequate.”

Follow Wayne Pratt on Twitter: @WayneRadio

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