Of the many deals that have collapsed recently, Adobe’s $20 billion acquisition of Figma, a start-up design software maker, was among the most beneficial.
The companies promised it was a way to “usually usher in a new era of collaborative creativity,” but regulators in three jurisdictions deemed it an unacceptable effort by a software giant to buy out a promising future competitor. For Dylan Field, CEO of Figma, this discrepancy highlights a fundamental divide between the way companies and regulators think about competition.
“It is frustrating and sad that we are not able to complete this,” Mr. Field said in his first interview since the companies announced their demise on Monday.
The end of the deal is another feather in the cap of antitrust enforcers. Both the European Commission and the British Competition and Markets Authority are preparing to formally challenge the deal. (Just hours before the companies announced the deal had been completed, the CMA said Adobe had refused to provide remedies to allay concerns.) Ministry of Justice – which Meet with Adobe and Figma representatives Last week – he was considering whether to oppose it as well.
“It is important in digital markets, as well as in traditional industries, to not only look at current overlaps but also protect future competition.” Margrethe VestagerThe head of competition policy at the European Commission said after announcing the end of the deal.
The organizers had a major concern: Would allowing Adobe to buy Figma eliminate a future competitor? To some, the deal was similar to Facebook’s purchase of Instagram in 2012. That concern has also fueled other enforcement efforts, including those against Microsoft’s acquisition of gaming company Activision Blizzard and Meta’s acquisition of virtual reality startup Wesen. (Both transactions have been closed.)
Mr. Field has repeatedly argued that the deal would have enabled his company to submit more offers, but he said on Monday: “Ultimately there is a gap between how regulators understand our business and how we understand our business.”
By the end of the week, it became clear that the deal could not work. “In recent weeks, we have both witnessed how the path is narrowing,” Mr. Field said, and that abandoning the deal would provide more clarity and certainty to employees and customers.
In hindsight, Mr. Field said the implementation climate was different now than it was when the companies announced their plan in September 2022.
Regulators’ opposition to the Adobe deal means Figma probably won’t be able to find another buyer, Mr. Field acknowledged, and the company will remain independent. He added that Figma has continued to expand over the past fifteen months, doubling its workforce to 1,300 employees and acquiring Diagram, a startup company based on artificial intelligence.
As for Adobe, it will have to pay a $1 billion breakup fee to Figma. (Adobe investors weren’t alarmed: The company’s shares closed 2.5 percent higher on Monday.)
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