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Adobe and Figma have mutually terminated their merger agreement due to mounting regulatory pressure in the UK and EU. Originally, Adobe intended to acquire Figma for $20B, but both companies have decided to go their separate ways.

  • Regulatory Scrutiny: The deal, announced in September of the previous year, immediately attracted regulatory attention due to its magnitude and its impact on competition.
  • Financial Implications: As part of the termination, Adobe will pay Figma a $1B cash fee. This decision stems from disagreements with recent regulatory findings, compelling the companies to move forward independently.
  • Regulatory Concerns: Regulators pointed out Adobe’s dominant position in the design software market, expressing worries about potential harm to competition and innovation. The UK’s Competition and Markets Authority (CMA) suggested remedies, including significant asset divestment, to restore fair competition. However, Adobe rejected these proposals.

The termination marks the end of a significant chapter for both Adobe and Figma. While their joint aspirations to redefine creativity and productivity won’t be realized through a merger, both companies remain poised to pursue their respective missions independently.

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