Updated posts 2026
Adobe and Figma, the cloud-based design tools, have announced the termination of their intended merger, valued at $20 billion, citing insurmountable regulatory barriers from the European Commission and the UK Competition and Markets Authority.
The decision, disclosed in a joint statement on Monday, was prompted by the companies’ acknowledgment that obtaining necessary regulatory approvals had become unfeasible. This move reflects a divergence from their earlier vision of transforming the creative landscape through collaborative efforts.
Shantanu Narayen, CEO of Adobe, expressed disappointment in the regulatory roadblocks but emphasized the companies’ determination to forge ahead independently. Narayen stated, “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.”
Notable here is which regulators killed the deal. Both companies are American, yet it was European and British authorities whose objections proved decisive, a reflection of how far the UK’s competition body in particular has extended its reach since Brexit. Any acquisition involving companies with meaningful revenue in those markets now requires clearance there, which means a transaction can collapse without a US agency ever issuing a ruling.
The initial acquisition announcement by Adobe in September 2020 had stirred significant market reaction, causing a drop in Adobe’s shares. Despite this, Adobe had asserted the acquisition’s potential, envisioning it as a natural extension of their portfolio. They highlighted the transformative impact, stating that “the combination of Adobe and Figma will usher in a new era of collaborative creativity.”
As per regulatory requirements, Adobe will compensate Figma with a $1 billion breakup fee, as disclosed in a regulatory filing.
This abrupt shift in direction contrasts with Narayen’s recent optimism about the acquisition’s benefits. In a statement to CNBC last Wednesday, he expressed faith in the acquisition’s potential to enhance consumer experiences. “We want to take the ability for what Figma has done with respect to creative collaborative software on the web, combine that with what Adobe has done in our creative and make it even more accessible for others,” Narayen explained. However, he acknowledged the challenges posed by the regulatory landscape.
This decision echoes the growing scrutiny by antitrust regulators over tech acquisitions. Recent instances include Meta’s sale of Giphy to Shutterstock for $53 million, prompted by the U.K.’s competition watchdog citing potential anticompetitive effects. Additionally, the Competition and Markets Authority (CMA) has been examining Microsoft’s investment in OpenAI.
Figma CEO Dylan Field expressed continued belief in the deal’s merits but acknowledged the divergence in perspectives with regulators. Field stated, “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.”
David Wadhwani, a senior vice president at Adobe, affirmed their commitment to exploring future collaboration opportunities with Figma to benefit their shared customer base.
The termination of the Adobe-Figma merger underscores the challenges posed by evolving regulatory landscapes and signals a pivotal moment in the tech industry’s consolidation efforts.
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