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Adobe’s $20 Billion Acquisition of Figma Called Off Amid Antitrust Concerns

by Anna

Adobe’s planned $20 billion acquisition of online design company Figma has been canceled due to resistance in Europe over antitrust concerns. The proposed cash-and-stock deal, announced in September 2022, aimed to leverage Figma’s web-based, multi-player capabilities to enhance the delivery of Adobe’s creative cloud technologies on the web. However, both companies decided to terminate the transaction, acknowledging that there was no clear path to secure necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority.

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Antitrust concerns have become a recurring issue for U.S. companies in Europe. Recently, biotech giant Illumina announced the undoing of its $7.1 billion acquisition of cancer-screening company Grail due to legal battles with antitrust enforcers in the U.S. and Europe. European regulators also expressed reservations about Amazon’s proposed acquisition of robot vacuum maker iRobot.

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In October, Microsoft faced scrutiny but eventually completed its $69 billion purchase of video game-maker Activision Blizzard after navigating antitrust challenges in Europe. Last month, the UK Competition and Markets Authority raised concerns about a potential tie-up between Adobe and Figma, suggesting a “substantial lessening of competition” in the global market for all-in-one product design software.

Figma, founded in 2012, offers a platform for collaborative design workflows, design systems, and a developer ecosystem for interactive mobile and web applications. Adobe, headquartered in San Jose, California, specializes in software for content creation, publishing, promotion, and document management.

David Wadhwani, President of Digital Media Business at Adobe, stated that the company will continue exploring future partnership opportunities with Figma. As part of the termination agreement, Adobe will pay Figma a previously agreed termination fee of $1 billion. Adobe’s shares rose by 2% before the market opened following the announcement.

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