Proactive Investors - Adobe Inc (NASDAQ:ADBE) and Figma have jointly announced the termination of their planned $20 billion (£16 billion) merger after failing to strike a deal with British and European regulators.
Both parties conceded that “there is no clear path to receive necessary regulatory approvals” for the merger that was first announced in September 2022.
The UK Competition and Markets Authority launched an investigation into the proposed takeover in May because Figma’s web design tools currently compete with Adobe’s XD product.
In late June, the regulator ruled that the merger would reduce competition in the screen design software market and asked Adobe to “offer acceptable undertakings to address these concerns.”
“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 Adobe chair and chief executive Shantanu Narayen.
“While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalise on our massive market opportunity and mission to change the world through personalised digital experiences.”
David Wadhwani, president of Adobe’s digital media business, added: “Figma has built an incredible product design platform, and I am confident in their continued innovation and growth after spending more than a year with their team and community.
“(The takeover) will result in the discontinuation of Adobe's own interactive product design tool, Adobe XD, as well as any potential successor product and thus constitute a so-called 'reverse killer acquisition',” the European Commission said in November.
With today’s announcement, it is clear that Adobe and Figma were unable to, or didn’t want to, address these concerns.
Figma’s co-founder and chief executive Dylan Field said he was “disappointed in the outcome”, but “I am deeply grateful to everyone who has contributed to this effort and excited to find other ways to innovate on behalf of our respective communities with Adobe.”
Adobe will pay Figma a previously agreed-upon termination fee.