Farmers will benefit and no competition will be lost by Deere’s proposed acquisition of Precision Planting, currently owned by Monsanto, the companies said in court papers filed Wednesday.

“In fact, competition will intensify,” the agribusinesses wrote in response to a Department of Justice lawsuit blocking the transaction over alleged antitrust violations.

The DOJ’s Antitrust Division alleges that the acquisition would create a monopoly in the market for “high-speed precision planting systems” to the detriment of American farmers, according to the suit filed Aug. 31 in U.S. District Court for the Northern District of Illinois.

The companies maintained Wednesday, in their court papers, that the agriculture industry would actually benefit “through faster and better innovation focused on helping commodity growers increase crop yields and operate more efficiently.”

The transaction would lead to more retail outlets where growers can buy Precision Planting components, the agribusinesses contend.

The DOJ asserts that transaction would “slow innovation” by eliminating rivalry and likely cause prices of high-speed precision planting systems to be higher than they would be.

Deere and Monsanto denied those and other claims. They allege that the DOJ challenge “stems from a Deere competitor’s fear of enhanced competition – not the best interests of the agricultural community,” the papers say.

“Tellingly, the Department of Justice, pursuant to procedures under the Hart-Scott-Rodino Act, long ago cleared this transaction to proceed, only to change its mind and bring this lawsuit when a Deere competitor protested,” the companies said in separate documents.

“However, it is a fundamental maxim that antitrust laws are meant to protect competition, not competitors. Growers deserve the benefits of this transaction and the increased innovation, competition and consumer choice that a combination of Deere and Precision Planting will create.”

DOJ alleges the takeover would violate the Clayton Antitrust Act. The complaint says intense competition between Deere and Precision Planting has benefited farmers through aggressive discounts and promotions, lower prices and innovative product offerings.

DOJ also maintains that Deere and Precision Planting account for at least 86% of U.S. sales for “high-speed precision planting systems.”

Definition of terms

The companies take issue with the DOJ description of the equipment as “high-speed planting systems” by calling the term vague and ambiguous.

Deere disagrees with DOJ defining high-speed precision planting as a distinct market from other planting equipment. Planting speed is only one factor growers consider when looking for ways to lower production costs and boost yield, and they look to a wide range of other options throughout the entire crop production cycle, according to the agribusinesses.

After years of development, Deere and Precision Planting introduced their planters, ExactEmerge and SpeedTube in 2014. The “game-changer” technology, as Monsanto has called it, enables farmers to plant twice as fast while maintaining accuracy.

The proposed acquisition would bring Precision Planting’s retrofit components “to more growers, in more geographies, more quickly, across a broader range of in-field jobs,” the companies say in defense to the monopoly allegations.

The acquisition would increase customers’ choices and access to retrofit options for many equipment brands and earlier models of planters, in addition to the integrated, new equipment that Deere makes. Adding Precision Planting’s retrofit offering to Deere’s existing integrated solutions will make a wider range of planting and precision agriculture solutions available to an increased number of customers at a variety of price points, the companies maintain.

Contrary to the DOJ claims that the transaction would likely slow innovation, Deere’s resources and complementary capabilities will help the Precision Planting team bring new, innovative solutions to market quickly, according to the companies.

The transaction would also enhance Deere’s innovation capabilities and creates value with Ag Leader technology, a recognized innovator in agricultural equipment, the papers say.

“As part of the transaction, Ag Leader will gain the right to manufacture, sell and even improve upon Precision Plantings SpeedTube and other components,” the papers say, adding that this will ensure an additional independent and competitive channel for growers and OEMs to buy SpeedTube and other components.

Monsanto states that Precision Planting has agreements that enable Case and AGCO to factory-install Precision Planting’s SpeedTube component and other Precision Planting products.

“The proposed acquisition, taken together with Deere’s commitment to CNH and AGCO, and its license grants, technology transfers and other commitments to Ag Leader that will become effective immediately upon Deere’s completion of the acquisition, is procompetitive,” the new court papers say.

“It will increase consumer choice, result in substantial merger-specific efficiencies and other procompetitive effects, and will directly benefit growers. These benefits will greatly outweigh any alleged anticompetitive benefits.”

The case is expected to go to trial in February before U.S. District Judge Edmond Chang.