Adobe abandons billion-dollar acquisition of Figma due to regulators’ concerns

Adobe and Figma have scrapped their acquisition plans. Adobe would acquire Figma for $20 billion, but the two companies see “no way” to gain regulatory approval for the deal. Market regulators previously expressed their concerns about the takeover.

Figma and Adobe have jointly decided to abandon the acquisition, write Adobe and Figma in a statement. The two companies jointly concluded that there is ‘no clear path’ to obtaining regulatory approvals from the European Commission and the UK CMA. Both competition regulators recently objected to the takeover.

“Adobe and Figma disagree with the regulators’ recent findings, but we believe it is in our best interest to move forward independently,” said Adobe CEO Shantanu Narayen. Now that the acquisition does not go through, Adobe must pay a previously agreed termination fee to Figma. That amounts to 1 billion dollars.

Regulators in the EU and the United Kingdom have expressed concerns about the proposed deal between Adobe and Figma. The takeover would harm competition. The European Commission said in November that Figma is the market leader in product design software and that Adobe is one of its biggest competitors. The takeover would create an overly dominant player on the market.

Also the British Consumer and Markets Authority published a provisional conclusion at the end of November, in which it stated that the acquisition would “eliminate competition in the design software market” unless Adobe divested “overlapping businesses” of Figma. Adobe was not willing to do that. The software giant previously reported that it was not prepared to make the CMA’s proposed concessions.

Adobe announced its intended acquisition of Figma in September 2022. The company wanted to pay $20 billion for the company, which specializes in design software for websites and apps, among other things.

Figma