Adobe Is Terminating $20 Billion Deal to Buy Figma

“
Adobe
and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” Adobe Chief Executive Shantanu Narayen said in a statement.

The U.K.’s CMA announced in November that it provisionally found the acquisition of Figma by Adobe would “likely harm innovation for software” and eliminate competition between two top competitors.

Reports also had said the Department of Justice likely was planning to file a lawsuit seeking to block the acquisition.

“Going through this process with Shantanu, David [Wadhwani, Adobe’s Digital Media Business president] and the Adobe team has only reinforced my belief in the merits of this deal, but it’s become increasingly clear over the past few months that regulators don’t see things the same way,” Figma Chief Executive Dylan Field said in the release.

In a research note Monday, William Blair analyst Jake Roberge said that he expects Adobe shares to have a muted reaction since investors already had become increasingly skeptical the deal would close.

“The termination of the Figma deal will likely result in more competition in the creative space over time, we remain constructive on Adobe’s core creative franchise and believe that it will be a durable double-digit growth business (excluding Figma) for the next few years given Adobe’s opportunity with generative AI,” Roberge added. He rates the stock as Outperform without a price target.

Shares of Adobe were rising 1.4% to $593 in premarket trading Monday. Coming into the session, the stock has gained 74% this year.

Write to Angela Palumbo at [email protected]