Figma and Adobe Abandon $20 Billion Acquisition Plan

Dylan Field, co-founder and CEO of Figma:

Figma and Adobe have reached a joint decision to end our pending acquisition. It’s not the outcome we had hoped for, but despite thousands of hours spent with regulators around the world detailing differences between our businesses, our products, and the markets we serve, we no longer see a path toward regulatory approval of the deal.

We entered into this agreement 15 months ago with the goal of accelerating what both Adobe and Figma could do for our respective communities. While we leave that future behind and continue on as an independent company, we are excited to find ways to partner for our users.

From a joint press release:

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 UK Competition and Markets Authority.

“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” said Shantanu Narayen, chair and CEO, Adobe.

Adobe owes Figma a $1 billion termination fee, but it’s unclear to me whether Figma was adequately prepared to go it alone as an independent company. Who else could and would acquire them for a similar price?

Benedict Evans, on Threads:

I did not understand how this could possibly get past regulatory review even without the current shift in attitudes. ‘Company that dominates a market buying a hugely strong new challenger that’s changing the market’ looked like an old-fashioned textbook competition case.

Yours truly, a year ago, when the acquisition was announced:

Figma’s breakthrough is that it was the first web-app to establish itself as a leading tool for professional designers. It’s hard to overstate how profoundly Figma disrupted Adobe’s status as the undisputed leader in design tools, because Figma made collaboration a first-class part of its workflow. Adobe has had many competitors over the decades, but Figma was the first that seemingly was reducing Adobe’s relevance to professional designers. I don’t think this acquisition was driven by revenue so much as by relevance.

Monday, 18 December 2023