Adobe’s $20 Billion Figma Acquisition Is In Limbo

Adobe (ADBE), the $266 billion design and marketing company’s acquisition of Figma, is under increased regulatory scrutiny. As the transaction delays, there are serious doubts about whether the deal will be accepted by some of the most powerful global regulators.The latest challenge for the Adobe and Figma acquisition came from the Competition and Markets Authority (CMA). In a statement, the regulator warned that Adobe will need to implement some remedies for it to approve the transaction. Precisely, the regulator wants Adobe to sell Figma Design and Adobe XD. This is notable since Figma Design is the biggest part of the company. Adobe has said that the requirement is unrealistic and vowed to continue with negotiations.The CMA is not alone in noting concerns about the $20 billion deal. In Europe, regulators warned that they could block the transaction if Adobe failed to do some remedies. Like the EU, the European Union has warned that the deal will reduce competition and harm consumers. Other regulators showing concerns about the deal are in the United States and South Korea. In the US, the FTC has vowed to sue to stop the transaction since it would erode competition in the design industry.Therefore, it is still unclear whether the transaction will go on after all. For one, Adobe might find it time-consuming to launch appeals from these regulators who are concerned about the design industry. In its earnings call last week, the company said:

“We continue to engage with the European Commission, the Competition and Markets Authority in the UK, and the US Department of Justice, as they conduct their regulatory reviews.”

Western regulators have become highly critical about mergers, which have reduced competition across key industries. Earlier this year, UK’s CMA initially rejected Microsoft’s bid for Activision Blizzard. Meanwhile, Adobe’s business is firing on all cylinders. Results published last week showed that the company’s revenues jumped by 11% in the last quarter to $5 billion. Its profit per share rose to $4.27 and the company sees its revenue being between $5.10 billion and $5.15 billion in the current quarter. Adobe is also actively repurchasing its stock, which has seen its total outstanding shares fall to 456 million from over 488 million in 2019.More By This Author:Here’s Why WTI And Brent Crude Oil Prices Are Tumbling FTX Files Revised Plan To Repay Creditors As Bankruptcy Legal Fees Hit USD 53K/HIbm Stock Price Forecast: The Big Blue Is Not AB InBev


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