Image: © MichaelVi/Stock.adobe.com
The companies have mutually agreed to terminate the deal, deciding there was ‘no clear path’ to the necessary regulatory approvals.
After constant regulatory roadblocks, the multibillion-dollar merger between Adobe and Figma has been abandoned.
First announced in September 2022, software giant Adobe announced plans to acquire web-based design platform Figma to boost its creative collaboration tech offering.
But the deal was soon marred with investigations from multiple regulatory authorities, including the UK’s Competition and Markets Authority (CMA) and the European Commission.
Both authorities have expressed concerns when announcing plans for in-depth investigations. In November, the UK’s CMA found that Adobe’s plan to purchase Figma could potentially harm the digital design sector. Meanwhile, the European Commission sent the companies a statement of objections, citing similar concerns.
In statements released today (18 December), the companies said they mutually agreed to terminate the transaction based on a joint assessment that “there is no clear path to receive necessary regulatory approvals” to complete the deal.
“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” said Shantanu Narayen, chair and CEO of Adobe.
“While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalise on our massive market opportunity and mission to change the world through personalised digital experiences.”
Figma’s co-founder and CEO Dylan Field said it was not the outcome he had hoped for. “While we leave that future behind and continue on as an independent company, we are excited to find ways to partner for our users.”
As a result of ending the deal, Adobe will pay Figma a reverse termination fee of $1bn, which is required in the event that the deal failed to receive regulatory clearance or if it failed to close within 18 months of September 2022.
Following the announcement, Margrethe Vestager, the EU commissioner responsible for competition, said the proposed acquisition would have terminated all current and prevented all future competition between Adobe and Figma.
“Our in-depth investigation showed that this would lead to higher prices, reduced quality or less choice for customers,” she said. “It is important in digital markets, as well as in more traditional industries, to not only look at current overlaps but to also protect future competition.”
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