Adobe is canceling the purchase of Figma

Adobe has canceled its roughly $20 billion purchase of Figma. So they confirmed it the two companies this Monday ended the effort, which began more than a year ago.

The news came after increasing pressure from regulators, particularly in the UK and the European Union. According to the companies, the decision to sever the link between the two was made based on the fact that they do not believe the ground is ready to gain approval from both the European Commission and the UK’s Competition and Markets Authority (CMA). .

Shantanu NarayenCEO of Adobe, disagreed with regulators investigating the acquisition, believing it could constitute an anti-competitive move.

“Adobe and Figma disagree with the recent regulatory findings, but we believe it is in our best interests to proceed independently. While Adobe and Figma have shared a vision to redefine the future of creativity and productivity together, we remain well positioned to capitalize on our enormous market opportunity and our mission to change the world through personalized digital experiences,” said the executive.

Adobe will pay Figma to get out of the contract $1 billion in cash. Dylan Field, co-founder and CEO of Figma, was also disappointed by the result, but assured that they will be looking for “other ways to innovate” with the Adobe communities.

Adobe is officially canceling its acquisition of Figma

Adobe buys Figma |  European Commission

When Adobe announced the purchase of Figma in September 2022, many saw it as an attempt to appear fresh and modern to its shareholders. After all, Figma has quickly become a leader in the product design and whiteboard software segment.

Although Adobe offers one of the most used design suites by professionals, Figma is considered a much better design than Adobe XD. Although the really curious thing is that, at least in the European Union, the original agreement for 20 billion dollars went virtually unnoticed. This was because the turnover limit set by the European Commission was not met.

However, a letter signed by several member countries of the European Union warned against the possible risks of the purchase. And that led to the opening of a formal investigation. So the idea spread that Adobe might actually be trying remove from the market to one of its strongest competitors.

Control pressure

A preliminary analysis by the European Commission showed that if the acquisition is approved, Adobe could slow down innovation and make its products more expensive. Therefore, it was decided to launch a more thorough antitrust investigation. The EU executive was supposed to announce its verdict in February 2024.

At the same time, the UK’s Competition and Markets Authority (CMA) launched its own antitrust investigation, and Adobe and Figma’s prospects worsened. In fact, the British entity was supposed to be the first to provide an opinion on the matter. On December 27, it had to decide whether to approve or block the transaction.

However, we must not forget that the United States also played a role in this story. In February of this year, it was unofficially known that the Ministry of Justice prepared a lawsuit stop Adobe’s purchase of Figma. And while there has never been much public progress on that front, it is clear that any rejection of a deal on the old continent could complicate the situation in North America.

So, Adobe and Figma decided to throw in the towel. The two companies will continue to compete, at least for now. It will remain to be seen if there really is any way for the two to work together without an acquisition.

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