Adobe’s plan to acquire Figma has come under scrutiny in an antitrust investigation in the EU.
Adobe’s proposed acquisition of rival Figma has been caught up in a protracted and complex European Union competition inquiry. According to reports, European antitrust officials intend to initiate a formal probe later this year due to concerns that the acquisition will result in less innovation and higher costs.
According to numerous sources, many significant purchases in the EU are subject to a so-called “phase 1” probe, which often lasts several months. According to insiders, EU regulators are contemplating a more extensive “phase 2” probe, which may take longer or perhaps halt the deal entirely.
Figma, along with Australia-based Canva, is one of the main providers of cloud-based design tools that claim to outperform Adobe’s long-dominant software such as Photoshop. Adobe’s bid for Figma values the company at 50 times its annual recurring revenue. The $20 billion price tag is more than quadruple Figma’s valuation in its 2021 private fundraising round and ten times its valuation in 2019.
Adobe has not yet notified EU regulators of the transaction. However, sources close to the corporation suggest that if it can produce convincing data to contradict concerns in the coming months, it may escape a thorough probe. The European Commission stated, “This transaction has not been formally notified to the Commission.” Companies are always granted the ability to notify if a transaction represents a merger and has an EU dimension.” Adobe stated that it is in preliminary negotiations with EU, UK, and US regulators and hopes to execute the acquisition satisfactorily.
