Adobe will terminate its US$20 billion deal to acquire the software company Figma, after both companies indicated there is “no clear path” for approval from antitrust regulators in the European Union and the U.K., according to a joint statement Monday.
The U.K.’s competition watchdog said Adobe failed to propose remedies for regulatory concerns.
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Key Takeaways
- Adobe and Figma reached a mutual decision to terminate their merger following a “joint assessment that there is no clear path to receive necessary regulatory approvals” from the European Commission—the EU’s executive arm—and the U.K.’s Competition and Markets Authority, according to a statement.
- Adobe chief executive Shantanu Narayen said both companies “strongly disagree with recent regulatory findings,” after the Competition and Markets Authority indicated earlier Monday Adobe failed to propose remedies for resolving regulatory concerns.
- Adobe will pay Figma $1 billion in termination fees as part of its acquisition deal, according to a securities filing.
- Adobe shares rose slightly (1.4%) after the announcement.
Key Background
Adobe announced its $20 billion cash-and-stock deal for Figma, a cloud-based designer platform, in September 2022. Adobe suggested Figma represented the “future of work,” adding Figma had “tremendous opportunities” in joining the company. The deal was criticized by regulators and Adobe’s investors, who argued Adobe had overpaid for a company that was previously valued at $10 billion. The Competition and Markets Authority suggested in November the deal would “eliminate competition” and “reduce innovation” by harming the U.K.’s digital design sector. Both companies met with Justice Department officials last week in an effort to secure approval from regulators in the U.S., according to Politico.
Big Number
$30 billion. That’s how much Adobe lost in market value after its acquisition of Figma was announced, according to Reuters.
Surprising Fact
Adobe’s deal to acquire Figma would have made Dylan Field and Evan Wallace—Figma’s cofounders and Forbes 30 Under 30 alumni—billionaires, according to our estimates. Field and Wallace hold a 10% stake in Figma, which would be valued at just over $2 billion.
This article was first published on forbes.com and all figures are in USD.
