Adobe Abandons $20 Billion Acquisition of Figma, Will Pay $1 Billion Breakup Fee

Adobe has announced that it is abandoning its $20 billion acquisition of Figma due to insurmountable regulatory pressure from the EU and UK.

Originally announced on September 15, 2022, Adobe agreed to acquire Figma for a mix of cash and stock worth $20 billion. The UK's Competition and Markets Authority (CMA) determined that the deal was detrimental to the product design market and delivered a notice of possible remedies that included prohibiting the transaction or requiring Adobe to divest Figma Design. Adobe strongly disagreed with the CMA's provisional findings, but has acknowledged that it will not be able to obtain regulatory approval. Now that it's backed out, Adobe will need to pay Figma a $1 billion termination fee.

Here's the official statement from Adobe and Figma:


Although both companies continue to believe in the merits and procompetitive benefits of the combination, Adobe and Figma mutually agreed to terminate the transaction based on a joint assessment that there is no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority.

"Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently," said Shantanu Narayen, chair and CEO, Adobe. "While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalize on our massive market opportunity and mission to change the world through personalized digital experiences."

"Figma has built an incredible product design platform, and I am confident in their continued innovation and growth after spending more than a year with their team and community," said David Wadhwani, president, Digital Media Business, Adobe. "I have been impressed with Dylan and his incredible team at Figma and will look for ways to partner to delight joint customers in the future."

"Going through this process with Shantanu, David 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," said Dylan Field, co-founder and CEO, Figma. "While we're disappointed in the outcome, I am deeply grateful to everyone who has contributed to this effort and excited to find other ways to innovate on behalf of our respective communities with Adobe."


Here's the details on the termination fee from the SEC Form 8-K filing.

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If either the Company or Figma terminates the Merger Agreement due to the failure of the closing to occur by the Outside Date or due to a final, nonappealable legal restraint in respect of antitrust law that makes illegal, prohibits or prevents the consummation of the Mergers, and at the time of such termination the closing conditions relating to obtaining required antitrust approvals and clearances or the absence of any injunction, law or order under antitrust laws making illegal, prohibiting or preventing the consummation of the Mergers have not been satisfied, but all other conditions to closing have been satisfied or waived, as applicable (except for those conditions which by their nature are to be satisfied at closing, provided that such conditions would be satisfied if the closing were to take place on such date), the Company will be required to pay or cause to be paid to Figma a reverse termination fee of $1 billion in cash.
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