Regulatory pushback causes Adobe to abandon plan to acquire Figma for $20 billion

"Acquisition is OK, please sell the core business."

In September 2022, industry giant Adobe announced that it would acquire well-known brands for up to US$20 billion. Figma, maker of a suite of UI and UX design tools. As soon as the news broke, the design community quickly responded with a lot of negative reactions

Designers’ biggest concern seems to be that Adobe will destroy or even terminate Figma’s products. There's also speculation that Adobe will integrate Figma's product ideas into Adobe's own products in a half-assed way. After all, Figma offers advanced features that allow entire teams to work together across platforms from any device and is one of the strongest competitors to Adobe’s UX/UI design app Adobe XD.

Now, this $20 billion merger and acquisition has failed. Adobe and Figma announced that due to pressure from regulators, the merger will be terminated and that under the terms of the merger agreement, Adobe will pay Figma a $1 billion termination fee

Statement link: https://news.adobe.com/news/news-details/2023/Adobe-and-Figma-Mutually-Agree-to-Terminate-Merger-Agreement/default.aspx Adobe and Figma mutually agree to terminate their merger agreement

UK and EU competition regulators have launched a sweeping review of the acquisition amid concerns over the creation of a monopoly in the product design, image editing and illustration markets. However, the acquisition was not approved by UK and EU competition regulators as Adobe refused to provide remedies, according to documents published by the UK Competition and Markets Authority (CMA) on Monday. The antitrust charges filed also believe that the transaction may significantly reduce competition in the global interactive product design software market, resulting in higher product prices, lower quality, and more limited consumer choices

Adobe President and CEO Shantanu Narayen said: "Adobe and Figma strongly disagree with the regulators' conclusions, but both parties also believe that it is in the best interests of each to move forward independently."

Large technology company acquisitions Startups and potential competitors are often very difficult things to do. For example, the EU antitrust watchdog has officially opposed Amazon's $1.7 billion plan to acquire Roomba maker iRobot; Nvidia originally planned to acquire Arm for $40 billion, but it was terminated due to competition regulations

After Microsoft provided a series of remedial measures, the CMA approved Microsoft's sky-high acquisition of Activision Blizzard. This is worth mentioning. The statement issued by the CMA in November showed that the CMA was considering banning the merger. Or require the two companies to sell off overlapping businesses, such as Adobe's Illustrator and Photoshop, as well as Figma's core product Figma Design

Figma CEO Dylan Field said: "Buy a company and then spin it off. This request is shocking. When I read this suggested remedy, I thought it was so funny that it was hard to believe that this was the decision of an official agency.” Figma CEO Dylan Field said: "The requirement to acquire a company and then spin it off is shocking. When I saw the proposal for this emergency measure, I thought it was so funny that it was hard to believe it was an official agency. decision."

Figma CEO Dylan Field

^{Adobe and Figma have reached an agreement to terminate the acquisition Consensus was reached, but both parties believed that the UK Competition and Markets Authority's (CMA) provisional findings contained serious legal and factual errors and used unreasonable evidence collection and assessment methods. As a result, Adobe and Figma intend to protest the CMA's findings on Thursday}

Adobe abandons plans to acquire Figma for $20 billion

Adobe terminates acquisition of Figma and pays termination fee

https://www.figma.com/blog/figma-adobe-abandon -proposed-merger/

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