Adobe cancels Figma takeover following clash with regulators

Adobe has terminated its £16bn takeover of Figma after clashing with regulators, paying a £800million termination fee. Big Tech concerns.

Adobe has decided to call off its planned acquisition of design platform Figma, which was valued at £16 billion, due to regulatory issues in Britain and Europe. The companies cited the lack of a clear path to approval from the Competition and Markets Authority (CMA) and the European Commission as the reason for terminating the deal. As a result, Photoshop-owner Adobe will pay Figma a termination fee of nearly £800 million.

The acquisition, which was announced in September of last year, faced intense scrutiny from regulators concerned about the potential market power of Big Tech companies acquiring start-ups that could be seen as rivals. Despite Adobe's argument that it does not directly compete with Figma, the CMA expressed concerns about the potential threat to competition in product design, image editing, and illustration if the two companies were to merge.

Adobe's chief executive, Shantanu Narayen, expressed disappointment with the regulatory findings but stated that it was in the best interests of both companies to move forward independently. The deal was initially viewed as a strategic move for the future of work, but investor concerns about the hefty price tag led to a significant decline in Adobe's market value when the acquisition was first announced.

This incident is not the first time the CMA has been involved in blocking major tech acquisitions. Earlier this year, the regulatory body prevented Microsoft's £60 billion takeover of Call Of Duty maker Activision Blizzard, ultimately forcing the companies to revise the terms of the deal in order to gain approval.

Overall, Adobe's decision to terminate the acquisition of Figma reflects the growing challenges faced by Big Tech companies in navigating regulatory scrutiny when pursuing major acquisitions. This case serves as a reminder of the complexities and uncertainties involved in such high-stakes deals, particularly in the ever-evolving landscape of technology and competition.

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