The end of the year is not kind to Adobe. The company that publishes Photoshop has just received a new warning from the British regulatory authority about its takeover of Figma.
Clouds are gathering over what was supposed to be one of the biggest takeovers in the history of the creative web. On September 15, 2022, Adobe announced its wish to buy Figma, a collaborative platform specializing in design for businesses. The deal, announced at $20 billion all the same, was to create a new online design juggernaut. But for some time now, competition authorities have been grinding their teeth, particularly in the United Kingdom.
Adobe caught red-handed?
The Competition and Markets Authority (CMA) announced on November 28 that it wanted to block the takeover. According to the British competition watchdog, such a merger-acquisition would have the power “toto eliminate competition […] in the field of product design software” and of “reduce innovation and new product development“. Figma being a “close competitor» from Adobe, such an operation could “making an impact on the UK digital design industry», which still weighs some 60 billion pounds.
To make matters worse, according to the CMA, Adobe abandoned, just before the takeover announcement, the development of a product with the capacity to compete with Figma’s solutions. Sufficient proof, according to the authorities, that the repurchase would mechanically lead to an impoverishment of the solutions available on the market.
A shower of problems predicted
It could therefore be that the acquisition of Figma by Adobe will be purely and simply blocked by the CMA, or at least that the British authorities will force the “transfer of duplicative activities“. In polished language, this means that Adobe would have to divest itself of certain branches of its business in order to hope to buy Figma. The CMA’s final decision will be known at the end of February 2024.
The CMA is not the only regulatory authority to impose a brake on Adobe. The European Commission also announced last August that the operation would be the subject of an in-depth investigation since “the transaction could significantly reduce competition in global markets“. Same thing in the United States, where a lawsuit intended to block the merger is being prepared. The bad news led to a slight inflection in Adobe’s stock price, which lost 0.7 points. Nothing to worry about the company, which had almost doubled its value since the announcement of the buyout in 2022.
Source : Competition Markets Authority
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