Adobe to Acquire Figma

Thursday, September 15, 2022 08:01 AM

https://news.adobe.com/news/news-detail ... fault.aspx

Adobe and Figma Mutually Agree to Terminate Merger Agreement

Monday, December 18, 2023 08:00 AM

https://news.adobe.com/news/news-detail ... fault.aspx

Adobe Inc.

Founded December 1982; 41 years ago
Mountain View, California, U.S.
Headquarters Adobe World Headquarters,
San Jose, California, U.S.

https://en.wikipedia.org/wiki/Adobe_Inc.
According to reports from foreign media such as CNBC and The Wall Street Journal, Adobe announced on December 18th that it is abandoning the $20 billion acquisition deal with Figma. The primary reason cited is the reluctance of antitrust regulatory authorities in the European Union and the United Kingdom to give their approval, leading to a low probability of the deal being approved. Consequently, Adobe has decided to terminate the transaction and will pay Figma a breakup fee of $1 billion.

This move highlights the increasing scrutiny of global antitrust enforcement agencies on technology mergers. In September 2022, Adobe and Figma reached a merger agreement for a $20 billion deal, involving a combination of cash and stock. The transaction was structured with half of the payment in cash and the other half in stock, and it was originally scheduled to be completed in 2023. However, due to the significant challenges posed by antitrust regulators, Adobe has decided to abandon the acquisition, and the deal will not proceed as planned.

Nevertheless, investors expressed concerns about this transaction, triggering a significant 16.79% drop in Adobe's stock price on the same day. The unease among investors stemmed from Figma's previous $200 million Series E funding round in 2021, valuing the company at $10 billion. Investors perceived Adobe's proposed acquisition price as excessively high, with limited expectations for significant performance enhancement within Adobe's business.

Figma was founded in 2012, and its flagship product is an online collaborative UI/UX design software. It competes directly with Adobe XD in the market.

In November of this year, the Competition and Markets Authority (CMA) in the United Kingdom raised concerns about the potential acquisition of Figma by Adobe. The CMA questioned whether the acquisition could lead to a monopolistic dominance in the market, suppressing technological innovation in the design software market and limiting choices for consumers in the United Kingdom. Similar concerns were also expressed by antitrust regulatory authorities in the European Union in November.

According to MoneyDJ XQ Global Winner System, investors perceived the failure of the Adobe-Figma merger as a positive development. On December 18th, Adobe's stock price increased by 2.47%, closing at $599.13.

https://www.moneydj.com/funddj/ya/yp050 ... c2169b91f9