Adobe and Figma jointly announced the cancellation of their merger on Monday, bowing to mounting pressure from regulators in the UK and EU. The proposed acquisition, where Adobe intended to buy Figma’s popular product design platform for a whopping $20 billion, has officially been terminated.
As a consequence of this decision, Adobe is set to pay Figma a reverse termination fee of $1 billion in cash.
“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 Adobe chair and CEO Shantanu Narayen in a statement.
Regulators raised concerns about Adobe’s existing dominance in the design software market, which played a pivotal role in their resistance to the merger. They feared that acquiring Figma, a rapidly growing product design platform currently outshining Adobe’s XD application, could stifle independent innovation.
Designers had echoed similar worries since the merger announcement in September 2022, a sentiment that regulatory bodies took seriously despite Adobe’s pushback during ongoing investigations.
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