Adobe and Figma Abandon $20 Billion Merger Over Regulatory Concerns

15 months ago, in a $20 billion deal that has under regulatory scrutiny, Adobe announced the acquisition of Figma—its biggest rival in digital design.

For these enthused users - at the time - Figma represented a cheaper (free) and better way to execute the design and prototyping of digital interfaces in a cloud-based environment. Adobe XD, on the other hand, started at $10/month, offering similar functionality but with a “clunkier” and somewhat “awkward” interface.

As Figma users nursed fears that their free, accessible tool would eventually exist behind Adobe’s paywall, antitrust bells rang out over the nature of the deal—never mind that its shiny acquisition couldn’t be considered a direct competitor. Barely a month after the initial announcement, the to better understand its deal with Figma in what would’ve been one of the largest takeovers of a private software company ever.

The DOJ continued to monitor the deal all through 2023, with no lawsuits as yet. However, Britain’s Competition and Markets Authority (CMA) took a more proactive approach. Last month, it maintained that the Adobe-figma merger would “” for software used by the majority of UK designers. The CMA’s position and subsequent decision to thoroughly investigate the potential merger was supported by a similar .

that both Adobe and Figma kept frequent contact with antitrust agencies in the U.S., EU, and UK to try and get the merger over the line. However, UK regulators highlighted that it would require remedies for Adobe to divest Figma design, a core asset of the acquisition. In response to this, Adobe pointed out that the required remedies adversely affected a core benefit of the deal, effectively defeating its purpose.

Adobe Chair and CEO, Shantanu Narayen, shared in a on Monday, Dec 18, that “Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently.”

Dylan Field, Figma CEO and Co-founder, mirrored Adobe’s exasperated tone in a short . “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.”

While both parties walked away from the deal with a sour taste in their mouths, Figma retained its independence with a not-too-shabby $1 billion for its troubles, triggered by a .

Adobe came in at #697 on this week’s HackerNoon Tech Company Rankings, while Figma finished at #2719

In Other News…

• The EU goes after X (formerly Twitter) in its first illegal content probe -
• Google set to pay $700 million as part of its Play Store dispute settlement -
• Lawmakers ask the DOJ to probe Apple for shuttering iMessage apps -
• Tesla recalls nearly all 2 million of its vehicles in the US -
• Pakistan’s former prime minister uses AI voice clone to campaign from prison -

Asher Umerie, Editor, World News & Scifi @ HackerNoon.

All rankings are current as of Monday. To see how the rankings have changed, please visit HackerNoon's Tech Company Rankings page.