# Adobe gives up on $20 billion acquisition of Figma

Source: https://arstechnica.com/tech-policy/2023/12/adobe-gives-up-on-20-billion-acquisition-of-figma
Kiwi News: https://news.kiwistand.com/stories/Adobe-gives-up-on-dollar20-billion-acquisition-of-Figma?index=0x6581aa3afdc91321617e284e7d306ff14b1bc7f042f0a428b5a8cf08044942ebbea1a1ef
Submitted by rsquare.eth on 2023-12-19 UTC, 2 upvotes, 0 comments

## Summary

Adobe has abandoned its roughly $20 billion acquisition of Figma, after the UK Competition and Markets Authority (CMA) raised concerns about the deal. The deal, announced in September 2022, would have valued Figma at roughly 50 times its annual recurring revenue. The CMA's November proposed remedies included either prohibiting the deal or requiring divestment of overlapping operations such as Adobe's Photoshop or Illustrator, or Figma's core product, Figma Design. Figma chief executive Dylan Field said he was "disappointed in the outcome," while Adobe and Figma said the CMA's provisional findings contained "serious errors of law and fact."

## Article

Speaking with the Financial Times last week, Figma chief executive Dylan Field said: “It is important that those paths of acquisition remain available because very few companies make it all the way to IPO. So many companies fail on the way.”

Shares in Adobe were up almost 2 percent in pre-market trading. Since the deal was announced, Adobe has turned its focus to embedding generative artificial intelligence into its products by, for example, enabling users to create novel stock imagery with AI.

The huge price that Adobe was willing to pay for San Francisco-based Figma had been seen by critics of the deal as an effort to quash the software giant’s most promising new rival in decades.

The deal, which was first negotiated during the COVID-19 pandemic’s boom in tech investment and announced in September 2022, would have valued Figma at roughly 50 times its annual recurring revenue, and double its last private funding round in 2021.

The companies were expected to appear in front of the CMA to contest the regulator’s provisional findings on Thursday this week.

Under its proposed remedies in November, the CMA said it was considering either prohibiting the deal or demanding the divestiture of overlapping operations, such as Adobe’s Illustrator or Photoshop, or Figma’s core product, Figma Design.

Field said that the latter suggestion left him amazed at “the idea of buying a company so you can divest the company.”

“When I read that document and saw that was one of the proposals, I thought it was quite amusing; it felt like a bit of a punchline to a joke. I was surprised to see that as a proposal from the agency.” In a statement on Monday, Field said he was “disappointed in the outcome.”

Earlier on Monday, the CMA had published the companies’ responses to its provisional findings, which Adobe and Figma said contained “serious errors of law and fact” and took “an irrational approach to the gathering and appraisal of evidence.”

“Requiring a multibillion-dollar global divestment of Photoshop or Illustrator in order to address an uncertain and speculative theory of harm is wholly disproportionate,” they wrote.

© 2023 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.