Adobe Terminates the $20 Billion Figma Acquisition

The proposed $20 billion acquisition of Figma by Adobe has been mutually terminated as European regulators raised concerns about potential adverse impacts on competition within the digital design sector. The deal aimed to unite Figma, a top-tier product design software, with Adobe, the preeminent supplier of design applications. Despite both Adobe and Figma expressing strong disagreement with the regulatory findings, the decision to abandon the acquisition reflects a commitment to addressing antitrust concerns and fostering a competitive environment. This development underscores the complexities of large-scale mergers within the tech industry, where regulatory scrutiny plays a pivotal role in shaping the landscape of innovation and market dynamics.

“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 U.K. Competition and Markets Authority,” the companies wrote in a press release today. 

Unveiled in September of the preceding year, the acquisition deal between Adobe and Figma faced inevitable regulatory scrutiny due to its considerable scale and implications for eliminating a key competitor in Adobe's domain. In the course of 2023, the U.S. Department of Justice (DOJ) meticulously examined the transaction, refraining from filing any official lawsuit to impede the proposed merger. Nevertheless, recent reports emerged over the weekend, revealing ongoing discussions between Adobe and Figma with the DOJ.

This last-minute engagement indicates a collaborative effort to avert potential legal action, shedding light on the intricate negotiations and strategic considerations involved in navigating regulatory challenges surrounding major corporate transactions in the technology sector. The outcome of these talks will undoubtedly influence the trajectory of both companies in the dynamic landscape of digital design and software development.

Irrespective of the ultimate outcome, Adobe and Figma had already been grappling with significant obstacles in Europe. Towards the end of November, the United Kingdom concluded that the intended acquisition posed a threat to innovation, prompting its competition authority to launch a comprehensive investigation. This decision mirrored the stance taken by the European Union (EU) in August, where a parallel course of action was adopted, signaling shared concerns about the potential impact of the proposed merger on competition and innovation within the digital design sector. The concurrent regulatory scrutiny from both the U.K. and the EU underscored the widespread apprehensions surrounding the deal and emphasized the complexities of navigating regulatory landscapes in multinational business transactions.