Adobe has officially canceled its $20 billion acquisition of Figma, a leading product design platform, following increasing regulatory scrutiny and objections. The deal, which was announced in September of last year, was terminated due to concerns raised by antitrust authorities in the UK and the European Union.
The UK's Competition and Markets Authority (CMA) had expressed apprehensions that the merger could negatively impact competition in the digital design sector, potentially stifling innovation in the field. This apprehension stemmed from Adobe's dominant position in the design software market.
As part of the termination agreement, Adobe will be required to pay Figma a reverse termination fee of $1 billion in cash. Despite the cancellation, both Adobe and Figma expressed strong disagreement with the regulatory findings but deemed it best to move forward independently.
Adobe's Chair and CEO, Shantanu Narayen, stated, "While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalize on our massive market opportunity and mission to change the world through personalized digital experiences."
The merger faced intense scrutiny, with regulators proposing significant divestments and concessions from Adobe to restore competitive conditions. Figma CEO Dylan Field acknowledged, "It's not the outcome we had hoped for," but added that they could no longer see a path toward regulatory approval.
This unexpected development marks the end of a 15-month regulatory review process, leaving both Adobe and Figma to continue as independent entities.