Today, Adobe and Figma announced that they have entered into a mutual agreement to terminate their previously announced merger agreement, originally announced on September 15, 2022, under which Adobe would have acquired Figma for a mix of cash and stock consideration, Business Wire reported.
Although both companies continue to believe in the merits and procompetitive benefits of the combination, Adobe and Figma mutually agreed to terminate the transaction based on a joint assessment that there is no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority.
“Adobe and Figma strongly disagree with recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” said Shantanu Narayen, chair and CEO, Adobe. “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 to change the world through personalized digital experiences.”
“Figma has built an incredible product design platform, and I am confident in their continued innovation and growth after spending more than year with their team and community,” said David Wadhwani, president, Digital Media Business, Adobe. “While we’re disappointed in the outcome, I am deeply grateful to everyone who has contributed to this effort and excited to find other ways to innovate on behalf of our respective communities with Adobe.”
The companies have signed a termination agreement that resolves all outstanding matters from the transaction, including Adobe paying Figma the previously agreed upon termination fee.
The Wall Street Journal reported Adobe has called off its planned $20 billion acquisition of the collaboration-software company Figma, weeks after a U.K. regulator warned that the deal would likely harm innovation.
Adobe and Figma said Monday morning that they have mutually agreed to terminate the cash-and-stock transaction because they couldn’t see a clear path to receiving regulatory approval from the European Commission and the U.K. Competition and Markets Authority.
The deal is the latest to run into a tighter global regulatory environment as some regulators and policy markets have been giving technology acquisitions more scrutiny than they have in the past.
CNBC reported that Adobe shares rose around 0.6% in Monday morning trading.
According to CNBC, Antitrust regulators have increasingly scrutinized numerous tech deals big and small. In May, after the U.K’s competition watchdog cited potentially anticompetitive effects, Meta sold Giphy to photo marketplace Shutterstock for $53 million, three years after it first acquired it. The CMA has also been reviewing Microsoft’s investment in Open AI.
Considering all of this, it appears that companies that want to do business in the U.K. will have some difficulties achieving that goal. I wonder if this sort of situation will break up other existing mergers.