Adobe and Figma Call Off Merger Amid Regulatory Hurdles
Adobe has officially announced the mutual decision with Figma to terminate their planned merger. The collaboration faced insurmountable challenges gaining approval from the European Commission and the UK’s Competition and Markets Authority (CMA).
Shantanu Narayen, Adobe’s Chairman and CEO, stated, “Both Adobe and Figma disagree with recent regulatory findings. However, we believe it’s in our best interests to proceed independently. Despite a shared vision to redefine creativity and productivity, we remain well-positioned to leverage vast market opportunities and pursue our mission of transforming the world through personalized digital experiences.”
Figma’s CEO, Dylan Field, expressed disappointment in the outcome, acknowledging the merger’s merits that became increasingly apparent. Yet, he conceded that regulators did not align with the companies’ perspectives.
As per the termination agreement, outstanding matters, including a termination fee from Adobe to Figma, have been resolved.
Regulators in the EU and the UK raised concerns about potentially creating a monopoly if Figma were removed from the market, allowing Adobe to attain a dominant position.
Potential consequences of an Adobe monopoly might involve increased product and service prices until new competitors emerge. Furthermore, diminished competitive pressure could potentially reduce Adobe’s incentive for innovation.
Recent regulatory scrutiny over tech conglomerate acquisitions, such as Microsoft’s acquisition of Activision Blizzard, reflects a growing vigilance concerning the market and competitive implications of these mergers.