Adobe and Figma, a cloud-based design tool, have announced that they will cancel their $20 billion merger due to regulatory constraints.
“There is no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority,” a joint statement from the companies read.
Adobe announced in a regulatory filing that it will pay Figma $1 billion as a breakup fee.
It was first stated in September 2020 that Adobe would purchase Figma in a $20 billion cash-and-stock deal. “The combination of Adobe and Figma will usher in a new era of collaborative creativity,” the company wrote in its initial announcement, reassuring investors that the acquisition would be a good fit for Adobe’s portfolio despite the steep decline in share price.
“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” Shantanu Narayen, CEO of Adobe, wrote in a statement. “While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalize on our massive market opportunity and mission to change the world through personalized digital experiences.”
“Meanwhile, it has grown more apparent in recent months that regulators don’t perceive things the same way,” Figma CEO Dylan Field stated in Monday’s joint statement, adding, “going through this process with Shantanu, David and the Adobe team has only reinforced my belief in the merits of this deal.”
“We will continue to look for ways to partner with Figma to delight our joint customers,” stated David Wadhwani, a senior vice president at Adobe, in a subsequent blog post.
Antitrust authorities have been examining more and more large-scale and small-scale tech transactions. Following possible anticompetitive impacts noted by the UK’s competition watchdog.
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