Adobe’s $20bn Deal For Figma At Risk From EU Regulators – Report

Image credit: Figma

Adobe’s ‘transformative’ deal to buy collaborative design start-up Figma for $20bn is reportedly to be reviewed by EU regulators

European officials are reportedly about to launch a new investigation, as regulatory scrutiny of acquisitions in the tech space continues to increase.

The Financial Times on Tuesday reported that Abobe’s $20 billion (£17.5bn) deal to acquire design collaboration firm Figma is under threat from an upcoming official investigation by European regulators.

Adobe’s proposed acquisition of Figma, which it described as a “transformative” moment that will take the company into a new era, was first announced last September.

Image credit: Figma
Image credit: Figma

Acquiring a competitor

Adobe defended the deal at the deal amid concerns that Adobe would gain “a real stranglehold on design software”.

Prior to the Figma acquisition, Adobe’s biggest-ever deal was its $4.75bn acquisition of Marketo in 2018.

The Figma acquisition will see Abode acquire one of its biggest potential rivals, a competitor to its Adobe XD vector design tool and a pioneer in building sophisticated design apps that run directly in a web browser.

Figma was founded in 2012 after its co-founders Dylan Field and Evan Wallace dropped out of Brown University at age 19 to accept a $100,000 grant from libertarian financier Peter Thiel.

The offering allows online collaboration on interface and user experience design and in addition to the web app offers offline tools for macOS, Windows, Android and iOS, with a feature set that includes vector graphics editing and prototyping tools.

Along with Australian start-up Canva, Figma is a leader in a new generation of browser-based design tools that have changed the game in an industry that has long been dominated by Adobe.

European investigation

Now the FT as reported that European antitrust regulators are preparing to launch a formal investigation into Adobe’s $20 billion buyout deal for Figma.

EU authorities reportedly plan to push forward with a detailed investigation, over anti-competition concerns, which could take many months and may ultimately derail the deal altogether, FT reported, citing people with knowledge of the move.

Adobe is reportedly in the preliminary phase of the regulatory process and having constructive discussions with British, EU, and US regulators about the deal while Figma looks forward to continued conversations with regulators, the companies said in separate emailed statements to Reuters.

The report comes after the UK’s competition watchdog, the CMA said in May that it was looking into the Adobe-Figma deal, while Bloomberg reported in February that the US Justice Department was preparing an antitrust lawsuit to block the deal.

These moves comes as regulators around the world step up their scrutiny acquisitions in the technology sector.

Many regulators are becoming increasingly concerned that large tech firms acquiring smaller innovative rivals could potentially throttle competition going forward.