WASHINGTON, Aug. 31 (UPI) -- The U.S. Department of Justice on Wednesday filed an antitrust lawsuit to prevent the merger of a planting company owned by Monsanto with agriculture company John Deere -- believing such a move would harm industry competitors.
The department's Antitrust Division announced the suit Wednesday.
John Deere and Precision Planting LLC from Monsanto, two industry giants, had planned to join forces in what some analysts believed to be a deal worth nearly $200 billion. Antitrust officials, though, believe it would give far too much power to the resulting company.
Justice officials said together, John Deere and Monsanto comprise about 86 percent of their market.
"Precision Planting has been a key innovator in high-speed precision planting and Deere's only significant competitor in developing and selling these technologies," Asst. Attorney General Renata Hesse said in a statement. "If this deal were allowed to proceed, Deere would dominate the market for high-speed precision planting systems and be able to raise prices and slow innovation at the expense of American farmers who rely on these systems."
The merger between John Deere and Monsanto was completed in February.
One of regulators' key concerns is the current state of the U.S. farming industry, which has steadily worsened since reaching an all-time high three years ago. With farmers earning declining incomes, Justice officials fear the merger will put the bite on competitors as well as Americans in the agriculture industry.
"The complaint details how the intense head-to-head competition between Deere and Precision Planting since that time has directly benefited farmers through aggressive discounts and promotions, lower prices and innovative product offerings," the department said in a news release. "Deere's proposed acquisition of the company it has described as its "number one competitor" would allow it to control nearly every method through which American farmers can acquire effective high-speed precision planting systems and provide it with the ability to set prices, output, quality and product features without the constraints of market competition."
Illinois-based John Deere said Wednesday that it would fight the Justice Department's lawsuit.
"[The] allegations about the competitive impacts of the transaction are misguided and the companies intend to defend the transaction vigorously against those allegations," the company said in a statement. "The proposed acquisition benefits farmers by accelerating the development and delivery of new precision equipment solutions that help farmers increase yield and productivity."
If successful, the federal lawsuit would be Monsanto's second failed merger attempt of 2016. Earlier this year, negotiations between the company and Bayer AG broke down.