Adobe, Figma Scrap $20 Billion Acquisition -- Update
18 Dezembro 2023 - 11:39AM
Dow Jones News
By Dean Seal
Adobe has called off its planned $20 billion acquisition of the
collaboration-software company Figma, weeks after international
regulators warned that the deal would likely harm competition.
Adobe and Figma said Monday morning that they have mutually
agreed to terminate the cash-and-stock transaction because they
couldn't see a clear path to receiving regulatory approval from the
European Commission and Britain's Competition and Markets
Authority.
The U.K. agency late last month said that, following a detailed
investigation, it provisionally found the acquisition would
eliminate competition between two main companies in product-design
software, reduce innovation and remove Figma as a threat to Adobe's
flagship Photoshop and Illustrator products.
The European Commission aired similar concerns in November and
gave Adobe a chance to respond to its objections.
Adobe Chief Executive Shantanu Narayen said Monday that the
companies strongly disagree with the recent regulatory findings but
"believe it is in our respective best interests to move forward
independently."
The companies have signed a termination agreement that requires
Adobe to pay Figma a $1 billion termination fee.
Adobe agreed to buy Figma, a maker of so-called collaborative
interface tools, in September 2022. The acquisition would have been
the largest yet for the Silicon Valley software giant known for its
common workplace tools and PDF files.
The deal, which would have cost Adobe the equivalent of about
the last three years of its combined free cash flow, surprised
Adobe's investors. It also drew criticism from some Figma users
over concerns that the acquisition would slow innovation and lead
to price changes.
The U.K. Competition and Markets Authority, whose profile had
been rising after it initially rejected Microsoft's since-completed
$75 billion acquisition of Activision Blizzard a month earlier,
said in May that it would investigate whether the Figma purchase
would result in a "substantial lessening of competition within any
market or markets in the United Kingdom for goods or services."
The U.K. competition regulator stepped up its investigation in
late June before disclosing its provisional findings in late
November.
In August, the European Union's antitrust enforcer opened its
own in-depth investigation into the proposed acquisition. The
European Commission said a preliminary probe indicated the
transaction might reduce competition in the global markets for
interactive product design software and digital asset creation
tools.
The E.U. watchdog formally objected to the deal last month,
saying it could significantly imperil competition for the supply of
interactive product design tools and of vector and raster editing
tools.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
December 18, 2023 09:24 ET (14:24 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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