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Adobe Inc. and design-tools maker Figma said Monday they have agreed to terminate their $20 billion merger agreement, announced 15 months ago, as the companies bowed to pressure from European regulators.
Adobe
ADBE,
the maker of Photoshop, Illustrator and other software tools, and Figma said they still believe in the merits of a merger, but they have mutually agreed that “there is no clear path to receive the necessary regulatory approvals from the European Commission and the U.K. Competition and Markets Authority.”
Adobe disclosed that it will pay Figma $1 billion as part of a previously agreed-upon termination fee.
Adobe’s stock rose 0.9% in morning trading Monday. It has run up 75.3% year to date, which puts it on track for its best yearly performance since it soared 187.7% in 1999.
Last month, the CMA said it saw a “substantial lessening of competition” from the deal, which was originally announced in September 2022, while the EU said the merger could significantly hurt competition.
“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” Adobe Chief Executive Shantanu Narayen said.
Figma CEO Dylan Field said: “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.”
Between Sept. 15, 2022, when the Adobe-Figma merger was announced, and Friday, Adobe’s stock has rallied 47.1%, while the SPDR S&P Software & Services exchange-traded fund
XSW
has advanced 21.5% and the S&P 500 index
SPX
has gained 17.3%.
