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Adobe and Figma have mutually agreed to terminate their $20 billion merger deal due to mounting regulatory pressure in the UK and EU. Adobe will pay Figma a $1 billion reverse termination fee as a result. Both companies disagreed with the regulators’ recent findings, but believe it is in their interests to move forward independently.
Regulators were concerned that Adobe would gain a near-monopoly in the design software market by acquiring the fast-growing Figma product. They feared this would stifle innovation in space. The UK Competition and Markets Authority wanted Adobe to divest significant assets to clear the deal, but Adobe rejected these solutions.
With scrutiny from authorities in Britain, the EU and possibly the US Department of Justice continuing to increase, Adobe had little room to move forward with the deal as originally planned. Figma’s CEO said that despite efforts to differentiate their business, they no longer see a path to regulatory approval.
The European Commission has now also dropped its antitrust investigation into the merger following Adobe’s announcement that the agreement has been terminated.