For some folk, it’s automatic — any and all industry mergers and/or significant acquisitions are bad, anti-competitive, designed to squeeze out smaller competitors and must be stopped at all costs. At least they must be closely scrutinized to determine who might be harmed and how much damage might such a transaction cause.
Of course, not everyone would agree with that position. But more often than not, speculation about the impact of such M&A deals tend to be heavily weighted on the side of the argument that they are ultimately not good for the customer.
At least 4 significant M&A efforts are currently underway that will impact North American and/or global agriculture:
- John Deere-Precision Planting
- Agrium-Potash Corp.
A recent column by David Nicklaus, business columnist for the St. Louis Post-Dispatch, presents a more moderate view of these deals. Since we’ve already covered some reports about opposition to these proposed transactions, Farm Equipment editors thought we’d share Nicklaus’ view it with our readers here.
A point presented in the column by a spokesperson for the Farm Bureau particularly got our attention.
“Bob Young, chief economist at the Farm Bureau Federation, says he wasn’t surprised that the slump in farm income led to at least one big merger among seed and chemical suppliers. Once Dow and DuPont got together, he adds, it was in farmers’ interests to have a second company gain similar size and scope.
“’If one of them happens, you really want another to happen so you have a couple of firms with strong chemistry and genetic traits in the same company,’ Young said. Deere and Case IH have been a farm equipment duopoly for a long time, he noted, yet the competition between green and red tractors remains fierce.”
What do you think about this position? We’d like to hear from you. Drop us your thoughts: email@example.com.