Adobe Abandons $20 Billion Figma Deal Due to Antitrust Approval Challenges

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Published: December 18, 2023 at 10:09 am Updated: December 18, 2023 at 10:09 am

Edited and fact-checked:
December 18, 2023 at 10:09 am

In Brief

Adobe announced the termination of $20 billion Figma deal due to regulatory approval huddles hindering the cash-and-stock deal.

Computer software company Adobe Systems Incorporated announced the termination of a $20 billion cash-and-stock deal for the cloud-based designer platform Figma.

In an official statement, the two companies explained that there is no clear path to obtain the necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority.

The deal, disclosed in September of the previous year, faced rigorous scrutiny from regulators concerned about company acquisitions that may enhance the market power of dominant companies or involve startups perceived as emerging rivals.

As part of the termination, Adobe will pay Figma a $1 billion breakup fee, as stated in a regulatory filing.

Britain’s competition watchdog announced that Adobe would not propose remedies to address regulatory concerns regarding the buyout. Adobe contended that it does not compete with Figma in any meaningful way.

The only product relevant to the antitrust question for the company was the Adobe XD design tool, which operated at a $25 million loss as a standalone app over the past three years and had only five full-time employees.

“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently”

stated Adobe CEO Shantanu Narayen in a written statement.

Antitrust Regulators Intensify Scrutiny on Big Tech Companies

The announcement was unexpected, given that last week Adobe CEO Shantanu Narayen announced the company’s continued belief in the acquisition and its potential benefits for consumers.

Antitrust regulators have been increasingly scrutinizing various tech deals, both significant and minor.

In May, following concerns raised by the UK’s competition watchdog about potential anti-competitive effects, Meta sold Giphy to the photo marketplace Shutterstock for $53 million, three years after initially acquiring it. The Competition and Markets Authority (CMA) has also been reviewing Microsoft’s investment in OpenAI.

The recent Adobe and Figma development adds to the escalating scrutiny by antitrust regulators on technology companies, signalling an intensifying trend in the industry.

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About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and engagement with scientific writing.

Alisa Davidson