Adobe and Figma have called off their proposed merger, which was announced more than a year ago. The software behemoth behind Illustrator, Photoshop, and now Firefly wanted to pay $20 billion for the collaborative UI design platform, but the acquisition was met with heavy scrutiny from EU and UK competition officials.
Adobe will pay a high price for abandoning its acquisition of the platform that remains our pick for the best UI design tools. As a result, it will have to pay Figma a $1 billion reverse termination fee. Adobe is also out of the UI design software industry for the time being.
The companies cited regulatory scrutiny as the basis for the deal’s cancellation. The UK Competition and Markets Authority (CMA) had requested that Adobe sell assets and source code in order for the merger to proceed, which Adobe had denied. A meeting on the subject was set for this week, and the CMA’s final judgment was not expected until February 25. Meanwhile, the European Commission was looking into the transaction, which has now been dropped.
Adobe chair and CEO Shantanu Narayen confirmed the announcement in a statement, saying, “Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently.”
While Adobe and Figma shared a goal of collaborating to transform the future of creativity and productivity, we are well positioned to capitalize on our vast market opportunity and mission to alter the world via individualized digital experiences.”
“It’s not the outcome we had hoped for,” said Figma CEO Dylan Field in a statement. However, despite hundreds of hours spent discussing distinctions between our businesses, products, and markets served with regulators around the world, we no longer see a route toward regulatory clearance of the merger.”
Purchasing Figma made sense for Adobe. Adobe leads the design software industry in many areas, but UI is an exception. Its own Adobe XD, which was dropped from the Adobe software list following the Figma acquisition, was always catching up to competing tools and failed to establish itself. Figma was far more popular.
However, after the transaction was disclosed, Figma users expressed their concerns. Many people admired Figma’s independence and small footprint and were concerned that Adobe would raise the platform’s price, which presently includes a free starting plan and a professional plan that starts at $12 per month per editor – substantially less than an Adobe Creative Cloud single-app subscription. Today’s fresh on social media has piqued the interest of creatives.
It will be interesting to see how Adobe responds, and whether it will try to resurrect Adobe XD or introduce a new platform for UI design. Despite the removal of the ability to purchase Adobe XD from its list of apps, existing customers can still access the software. However, it has been mostly ignored, and there were little improvements on UI design at Adobe MAX this year, implying that Adobe felt the Figma takeover was complete.
See our recent day in the life story with product designer Natasha Tenggoro to learn more about Figma. See also our Figma review. You can get a free Figma Pro subscription with our online UX design course till the end of the month.
