Adobe Call Off Its $20 Billion Figma Acquisition in Light of Antitrust Issues
In Brief
The tech giant Adobe has decided to pull out from its $20 billion deal to acquire Figma, facing significant roadblocks in regulatory approvals necessary for finalizing this cash-and-stock arrangement.
Computer software company Adobe Systems Incorporated the tech company declared its withdrawal from the significant cash-and-stock merger aimed at the cloud-based design platform. Figma .
In an official declaration, both companies detailed that there’s a lack of a clear path to secure the essential regulatory green lights from the European Commission and the UK's Competition and Markets Authority.
Initially revealed back in September of the previous year, the deal encountered intense scrutiny from regulators wary of corporate takeovers that might bolster the clout of already dominant firms or involve startups seen as potential competitors.
As part of the termination, Adobe According to a regulatory filing, Adobe will incur a breakup charge of $1 billion for ending the agreement with Figma.
The UK's competition authority has made it clear that Adobe it would not seek solutions to alleviate regulatory worries about the acquisition. Adobe asserted that it does not see Figma as a direct competitor.
Regarding antitrust concerns, the only relevant product was Adobe XD, which has struggled financially, losing around $25 million as a separate entity over the last three years and operating with just a handful of employees.
“Although Adobe and Figma have significant disagreements with the recent regulatory assessments, we find it best for both parties to continue independently,”
noted Adobe’s CEO, Shantanu Narayen, in a written response.
Regulatory Bodies Increase Scrutiny of Major Tech Firms
The announcement was unexpected This follows a recent statement from Adobe CEO Shantanu Narayen, who reiterated his faith in the acquisition’s advantages for consumers.
Antitrust watchdogs have been closely examining a range of tech transactions, regardless of their size.
In May, after receiving concerns from the UK's competition authority about the possibility of anti-competitive outcomes, Meta sold Giphy to Shutterstock for $53 million, three years after picking it up. The Competition and Markets Authority (CMA) is also probing Microsoft's investment in OpenAI.
The recent developments regarding Adobe and Figma highlight the growing scrutiny that antitrust regulators are directing towards tech firms, marking a significant trend in the sector.
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