Adobe’s planned $20 billion acquisition of online design company Figma has been called off due to pushback in Europe over antitrust concerns. The two companies announced the cash-and-stock deal in September 2022, seeking to combine Figma’s web-based, multiplayer capabilities with Adobe’s creative cloud technologies to accelerate delivery on the web. However, last month, the UK Competition and Markets Authority conducted an early review of the potential tie-up and concluded that it would result in a “substantial lessening of competition” in the global market for all-in-one product design software for professionals, as well as editing software.
According to a prepared statement issued by Adobe and Figma, although both companies continue to believe in the merits and procompetitive benefits of the combination, they mutually agreed to terminate the transaction based on a joint assessment that there is no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority. The companies cited the absence of a clear path to approval as the primary reason for calling off the acquisition.
The decision to terminate the acquisition comes as a surprise to many, given the significant investment Adobe was willing to make in Figma. The acquisition would have allowed Adobe to expand its reach into the web-based design and collaboration space, where Figma has established a strong presence. Figma’s platform allows designers to collaborate through multiplayer workflows, sophisticated design systems, and a developer ecosystem, making it an attractive target for Adobe.
Adobe Calls Off Figma Acquisition Due to Regrets
Despite the termination of the acquisition, Adobe has indicated that it will still look for ways to partner with Figma. In a statement, David Wadhwani, president of digital media business at Adobe, said that the company will continue to explore opportunities to work with Figma and leverage its technology to accelerate innovation in the design space. The termination agreement between the two companies resolves all outstanding matters from the transaction, and Adobe will pay Figma a termination fee of $1 billion, which was previously agreed to.
The news of the acquisition’s termination has had a positive impact on Adobe’s stock price, with shares rising 2 per cent before the markets opened. The decision to terminate the acquisition is seen as a relief by many investors, who were concerned about the potential antitrust issues and the significant investment required to complete the deal.
The termination of Adobe’s planned acquisition of Figma is a significant development in technology and design. The move is seen as a pragmatic decision by the companies, given the lack of clarity on regulatory approval. While the acquisition is off the table, Adobe and Figma will likely continue to explore opportunities to collaborate and innovate in the design space. Figma’s platform and capabilities will remain an attractive option for designers and developers, and its partnership with Adobe will likely continue to drive growth and innovation in the industry.
