US moves to block Deere purchase of Monsanto unit

The US Justice Department on Wednesday said it was suing to prevent farm equipment maker Deere from acquiring Precision Planting, a subsidiary of the biotech giant Monsanto.

Combining the two Illinois companies, which together control 86 percent of the market for high-speed precision planting systems, would leave US farmers exposed to higher costs without price competition, the department said.

"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," Renata Hesse, acting head of the Justice Department's anti-trust division, said in a statement.

Because farmers have only so much time every year to plant, precise, high-speed planting can be highly valuable.

Deere & Co and Precision Planting both introduced their high-speed precision planting systems in 2014 and a year later together racked up approximately $1 billion in sales.

Deere's plan to buy the Monsanto unit was announced last November.

Shares in Deere were down 1.1 percent on the New York Stock Exchange shortly after 1600 GMT. Monsanto shares lost 1.6 percent.