Figma CEO laments collapse of $20 billion deal with Adobe – The New York Times

Among the many deals that have fallen through recently, Adobe’s $20 billion acquisition of Figma, an up-and-coming design software maker, is among the most telling.

The companies had promised that it was a way to “launch a new era of collaborative creativity,” but regulators in three jurisdictions saw it as an unacceptable attempt by a software giant to buy a promising future competitor. For Dylan Field, Figma’s chief executive, the contrast highlighted a fundamental divide between how companies and regulators view competition.

“It’s frustrating and sad that we can’t complete this,” Mr. Field said in his first interview since the companies announced his demise on Monday.

The end of the deal is another milestone for the antitrust authorities. Both the European Commission and the UK Competition and Markets Authority were preparing a formal challenge to the transaction. (Just hours before the companies announced the deal was falling through, the CMA said Adobe had refused to offer remedies to address concerns.) The Justice Department, which met with Adobe and Figma representatives last week, had considered whether it should also object.

“In digital markets, as well as in more traditional industries, it is important not only to take into account current overlaps, but also to protect future competition,” said Margrethe Vestager, head of competition policy at the European Commission, after the deal’s collapse was announced.

Regulators had major concerns: Would Adobe eliminate a future competitor by buying Figma? To some, the deal was similar to Facebook’s purchase of Instagram in 2012. This concern has also underpinned other enforcement efforts, including those against Microsoft’s acquisition of gaming company Activision Blizzard and Meta’s acquisition of virtual reality start-up Within. (Both deals have been completed.)

Mr. Field repeatedly argued that the deal would have allowed his company to create more offerings, but said on Monday that “ultimately there is a bit of a gap between regulators’ understanding of our business and our understanding of our business.”

Over the weekend it became clear that the deal would not be successful. In recent weeks, “we have both seen the path narrowing,” Mr. Field said, and calling off the deal would bring greater clarity and certainty for employees and customers.

In hindsight, Mr Field said the enforcement climate was different now than when the companies announced their plan in September 2022.

Regulators’ opposition to the Adobe deal means Figma is unlikely to find another buyer, Mr. Field acknowledged, and the company will remain independent. He added that Figma has continued to expand over the past 15 months, more than doubling its workforce to 1,300 and acquiring Diagram, an AI-based startup.

Adobe must pay a $1 billion breakup fee to Figma. (Adobe investors were undeterred: The company’s shares closed 2.5 percent higher on Monday.)