By Jacob Bunge 

Seed giant Monsanto Co. terminated a deal to sell its high-tech crop planter unit to equipment maker Deere & Co. following pushback from the U.S. Department of Justice.

The two companies announced the deal in November 2015 along with a data-sharing agreement that aimed to bolster Monsanto's digital farming unit, the Climate Corp.

The unit is part of Monsanto's wager on the power of data-backed technology to boost farm yields. For Deere, the deal would have strengthened high-tech farming implements and services that help farmers boost efficiency at a time of low crop prices.

Antitrust officials feared the deal would suppress competition to develop technology that helps farmers plant seeds more quickly and precisely. The Justice Department sued last year to stop the deal, estimated at about $190 million. Monsanto and Deere said then that they would fight official resistance that they called misguided.

Mike Stern, chief executive of Monsanto's Climate unit, said Monday that the company had determined there was no path to winning approval for the deal. "We felt it'd be best to step back and look for another potential buyer for the business," he said.

He said the transition from the Obama administration to the Trump administration didn't affect Monsanto's decision.

Deere said the companies were prepared to battle in court for the deal. "We believe it would have been clear the challenge to the transaction was based on flawed assessments of the marketplace," said John May, Deere's chief information officer.

"The companies' decision to abandon this transaction is a victory for American farmers and consumers," said Andrew Finch, acting assistant attorney general in the Justice Department's antitrust division. Justice officials argued the deal would shrivel competition that has yielded better prices for farmers

While Monsanto canceled the sale, Deere terminated the related agreement that would have streamlined the transmission of data from Deere machines to Climate servers.

The deal's termination is "a bit of a setback for Deere and probably a tactical victory for CNH Industrial," said Lawrence De Maria, an analyst for William Blair & Co, referring to Deere's main competitor in the U.S., CNH Industrial NV.

The Monsanto-Deere deal could have weakened an existing agreement that allows Climate's system to he installed on CNH-built planters at the factory, he said. CNH's brands include Case IH and New Holland.

Bob Tita and Brent Kendall contributed to this article.

Write to Jacob Bunge at jacob.bunge@wsj.com

 

(END) Dow Jones Newswires

May 01, 2017 18:43 ET (22:43 GMT)

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