In my last editorial, I shared some initial reaction from dealers to the U.S. Department of Justice intervening on John Deere’s planned acquisition of Precision Planting.
Talking with a few more precision retailers since then, there’s not been a consensus on an expected outcome of the DOJ suit. Some forecast a restructuring of the original deal, which would pare down the power position that Deere would assume in the planter technology market should the deal be approved wholesale.
A handful of others suggest that the entire acquisition could fall apart and that government pressure to nix the deal could ultimately lead Deere to walk away. (The dealers who offered this outlook admitted it’s as much wishful thinking as a likely reality).
But the majority of dealers I spoke with believe that the deal will get done regardless of the pending litigation. “Deere has to be determined to get this done, and knowing how this will separate them from the competition, I’m not sure this will be a big enough roadblock to stop it,” says one precision dealer.
The results of our latest Precision Farming Dealer poll reinforce the views of the individual dealers with more than 150 respondents weighing in with their projected outcome of the DOJ suit. Most dealers — 45% — view the lawsuit as a temporary delay of the inevitable and ultimately, the deal will get done as planned.
Another 32% say the original acquisition will be re-negotiated and 23% think the deal will dissolve and foreshadow more active government oversight of mergers and acquisitions in the ag industry.
In his recent column, ag attorney Todd Janzen offers a few potential outcomes, depending on how the law is interpreted. He says the court could require Deere to divest itself of Precision Planting’s SpeedTube technology, creating a spin-off or selling the technology to a third party. Or the court could require Deere to license the SpeedTube technology to competitors. Or the court could simply prohibit Deere from acquiring Precision Planting.
We’ll continue to keep our eyes on future developments, but in the meantime, I’d invite you to offer your opinion on the outcome here.