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Adobe cancels $20 billion Figma acquisition amid scrutiny

What To Know

  • In November, the Competition and Markets Authority (CMA) in the UK and the European Commission expressed concerns regarding the potential acquisition’s impact on competition.
  • The European Commission issued a Statement of Objections to Adobe last month, cautioning against the potential reduced competition in global markets for interactive product design software and other creative design software, including vector editing tools like Illustrator and raster editing tools akin to Photoshop.
  • Despite shared aspirations between Adobe and Figma to redefine the future of creativity and productivity, both companies are determined to capitalize on individual market opportunities and pursue their mission of transforming the world through personalized digital experiences.
  • Additionally, Adobe anticipated potential opposition from the US Department of Justice to the deal, prompting discussions between the companies and DOJ officials last week to secure approval for the merger in the United States.

Adobe has decided to abandon its planned $20 billion acquisition of Figma, as both companies concluded that gaining approval from UK and European Union regulators would be unattainable. A comprehensive agreement has been reached between the two entities, settling all aspects of the termination of the Adobe-Figma merger.

Given the regulatory challenges, Adobe will fulfill its commitment to pay Figma a termination fee of $1 billion. In November, the Competition and Markets Authority (CMA) in the UK and the European Commission expressed concerns regarding the potential acquisition’s impact on competition.

The CMA, in its preliminary findings, highlighted that the merger would “eliminate competition between two main competitors.” Options under consideration by the watchdog included blocking the deal or mandating Adobe to divest Figma’s core product, Figma Design, along with Adobe XD.

Despite Adobe’s refusal to propose remedies to the CMA, stating that no realistic solution would address the concerns raised, the company acknowledged the need for ongoing engagement with the regulatory body.

The European Commission issued a Statement of Objections to Adobe last month, cautioning against the potential reduced competition in global markets for interactive product design software and other creative design software, including vector editing tools like Illustrator and raster editing tools akin to Photoshop.

While Adobe had initially expressed a willingness to provide remedies, recent developments suggest a shift in that stance. Shantanu Narayen, Adobe’s Chair and CEO, expressed disagreement with the regulatory findings but emphasized the mutual decision to move forward independently.

Despite shared aspirations between Adobe and Figma to redefine the future of creativity and productivity, both companies are determined to capitalize on individual market opportunities and pursue their mission of transforming the world through personalized digital experiences.

Additionally, Adobe anticipated potential opposition from the US Department of Justice to the deal, prompting discussions between the companies and DOJ officials last week to secure approval for the merger in the United States.

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