Adobe and Figma's Canceled $20 Billion Merger

Leading multimedia software company thriving in the design software industry, Adobe, has canceled its proposed merger with cloud-based collaborative design platform Figma that originally prompted a $20B purchase.

After proposing a merger agreement to acquire Figma back in September 2022, the two companies saw regulatory requirements from the European Commission and the UK Competition and Markets Authority (CMA) that both refused to meet.

Market Monopoly

Based on CMA’s press release, Adobe’s ownership of Figma could bring further monopolization on Adobe’s part and negatively impact the UK’s digital design industry. With Adobe and Figma being two of the biggest providers of product design software for designers, creative agencies, and businesses, CMA fears that the merger could potentially harm innovation and development in the UK’s design software market.

According to CMA’s investigations, an increasing number of UK businesses that utilize design software use Figma. This makes Figma contribute significantly to the UK’s app development market, which was valued at around £19.4B back in November. Figma also contributes to the UK’s £60B digital design sector, which represents 2.7% of the nation’s economy.

If Adobe and Figma were to go along with their merger without following any of the proposed changes given by CMA, any competition between Adobe and Figma would, without a doubt, falter and plummet the UK’s creative economy.

Creative Accessibility

Sharing a different perspective from regulators, Adobe and Figma instead envisioned their merger as a way to make creativity accessible and to build more powerful tools that allow creatives to bring their ideations and designs to life together. After witnessing the CMA’s disapproval of Meta’s acquisition of the GIF platform, Giphy, last May, the two asserted their belief that the acquisition would allow smaller companies to thrive under larger corporations more easily in the future.

After months of negotiations and discussions with regulators, the differences in point of view were too distinct, and the requested changes brought by the CMA, as well as the European Commission, were not aligned with Adobe and Figma’s vision.

Adobe and Figma were given until December 19th to perform remedies and create changes in their contract, which eventually led to a mutually agreed termination. The two companies believed that moving forward independently would be the greater option compared to meeting the regulatory standards of the acquisition, and signed a termination agreement that includes a reverse termination fee of $1B that Adobe is required to pay to Figma.

Back to Their Own Ways

After spending over a year trying to reach a deal and dodge regulatory roadblocks, Adobe and Figma have gained a sense of respect for each other, believing that despite the termination, each will continue to thrive in the digital design industry.

Benefiting from the generative AI boom, both Adobe and Figma have launched new software development features, providing accessible innovation to even more creatives. Figma’s FigJam is equipped with AI features that allow simple prompts to turn into visual timelines, organizational charts, and more creative templates, whilst Adobe’s generative AI, named Firefly, can create HD images, text effects, and color palettes from text prompts.

Meme & AI-Generated Picture

Job Posting

• Adobe - Senior Product Manager, Data and Analytics, Adobe Firefly - San Francisco, CA+ (In Office/Hybrid)

• Adobe - Software Architect, Technical Lead, Analytics Platform - San Francisco, CA (In-Office/Hybrid)

• Figma - Product Design Intern, 2024 - San Francisco, CA (In-Office/Hybrid)

• Figma - Software Engineer, FigJam - San Francisco, CA+ (In-Office/Hybrid)

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