- Adobe and Figma have decided to mutually terminate their merger agreement following increased regulatory pressure from the UK and EU. The proposed $20 billion acquisition by Adobe of the Figma product design platform faced regulatory challenges due to concerns about Adobe's near-monopoly in the design software market. Regulators worried that the deal could stifle innovation, particularly as Figma had become more popular than Adobe's XD application.
- Despite both companies strongly disagreeing with recent regulatory findings, they have opted to move forward independently. As a result of the termination, Adobe will pay Figma a reverse termination fee of $1 billion in cash. The UK’s Competition and Markets Authority (CMA) had suggested remedies, including significant divestments, to address antitrust concerns and approve the merger. However, Adobe rejected these proposals in a letter dated December 14th. The European Commission, which was also scrutinizing the deal, has dropped its antitrust investigation following Adobe's announcement.
Why it matters
Figma's CEO, Dylan Field, expressed disappointment with the outcome, “It’s not the outcome we had hoped for. But despite thousands of hours spent with regulators around the world detailing differences between our businesses, our products, and the markets we serve, we no longer see a path toward regulatory approval of the deal.”
