Image: Figma
Adobe and Figma have called off their $20 billion merger deal after facing regulatory hurdles in the UK and EU. Adobe will pay Figma a US$1 billion breakup fee in cash. Adobe had little chance to salvage the deal and get what it wanted from Figma, without giving up some of its own products.
The regulators feared that Adobe, which dominates the design software market, would stifle innovation by buying Figma, a rising competitor that offers a web-based collaborative design platform. Many designers also opposed the deal, which was announced in September 2022. Adobe defended its position throughout the investigations.
On December 14, Adobe refused to accept the UK’s Competition and Markets Authority (CMA)’s proposal to sell some of its assets, code, and staff to restore competition. The CMA was set to make a final decision on February 25, after a meeting on December 21. The European Commission and the US Department of Justice were also probing the deal. After Adobe’s withdrawal, the European Commission dropped its inquiry.