Adobe scraps $20 billion acquisition of Figma

Adobe will abandon its $20 billion acquisition of design software maker Figma, the two companies said Monday, bowing to growing regulator opposition to the deal on both sides of the Atlantic.

The announcement is the latest sign that government campaigns to more aggressively investigate mergers are claiming some success.

The deal, announced last fall, was intended to give Adobe control of a fast-growing provider of collaborative design software. But the planned combination raised concerns among antitrust regulators in the United States, the European Union and Britain about whether it would reduce potential competition with Adobe’s flagship products such as Photoshop and Illustrator.

Although the companies have argued they do not compete, regulators said the acquisition could prevent future rivalry and lead to higher prices for consumers. “It is important in digital markets, but also in more traditional industries, not only to look at current overlaps, but also to protect future competition,” said Margrethe Vestager, the European Commission’s head of competition policy, in a statement declaration.

Monday’s announcement was an acknowledgment that the companies were unlikely to overcome these objections and would have had to fight regulators for months in court in three jurisdictions.

“Adobe and Figma strongly disagree with the regulators’ recent findings, but we believe it is in our best interest to move forward independently.” Shantanu NarayenAdobe’s chairman and CEO said in a statement.

Dylan fieldCEO of Figma, said in a blog post: “We no longer see a path to regulatory approval of the deal.”

Under the terms of the now-scrapped plan, Adobe must pay Figma a $1 billion termination fee.

Shares of Adobe rose 1.7 percent in premarket trading on Monday.