Adobe’s proposed $20bn takeover of digital design rival Figma has been called off, the two companies announced today. The news comes after regulators around the world announced they would investigate the deal over competition concerns.
First announced in September 2022, Adobe said at the time that the duo’s combined portfolio would help “power the future of work”. But 18 months later the deal has collapsed, and all Adobe has to show for its efforts is a $1bn bill for a severance payment it owes Figma as part of the initial agreement between the businesses.
Why the Adobe deal for Figma hit the buffers
A statement released today said that although “both companies continue to believe in the merits and procompetitive benefits of the combination”, they have 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 (CMA)”.
As reported by Tech Monitor, last month the CMA completed a detailed Phase Two antitrust investigation into the deal, and concluded that it would “eliminate competition” by removing Figma as a “threat” to Adobe’s product portfolio.
“Adobe and Figma are two of the world[‘s] leading providers of software for app and web designers, and our investigation so far has found that they are close competitors,” said Margot Daly, who chaired the CMA investigation. “This proposed deal, therefore, has the potential to impact the UK’s digital design industry by reducing choice, innovation and the development of new competitive products.”
The CMA decision was provisional, but mirrored the findings of the European Commission, which said allowing the takeover would “significantly reduce competition in the global markets”. It also announced this provisionally, setting a deadline of 5 February to make a final decision, potentially giving Adobe and Figma time to address its concerns. The US government, meanwhile, had yet to issue a view on the deal, despite having opened a Department of Justice investigation into the acquisition in February.
Adobe and Figma ‘disappointed’ to call the whole thing off
The news will likely be welcomed by some in the design community, many of whom expressed misgivings at the time the deal was announced that Adobe may have a negative influence on Figma.
The companies “strongly disagree with the recent regulatory findings” according to Shantanu Narayen, Adobe CEO. But he said: “We believe it is in our respective best interests to move forward independently.”
Narayen added: “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 and mission to change the world through personalized digital experiences.”
His counterpart at Figma, Dylan Field, added that going through the acquisition process had “only reinforced my belief in the merits of this deal”. Field said: “It’s become increasingly clear over the past few months that regulators don’t see things the same way.
“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.”