Adobe slips on report saying DOJ plans suit to block $20 billion Figma deal
PUBLISHED THU, FEB 23 20235:40 PM EST
UPDATED THU, FEB 23 20236:03 PM EST
Jordan Novet @JORDANNOVET
CNBC.com
KEY POINTS
-- The Justice Department is reportedly working on a case to stop Adobe from buying a rising competitor, startup Figma.
-- An Adobe spokesperson stressed that it focuses on a market that’s different from the one where Figma operates.
Adobe shares fell as much as 5% in extended trading following a report that said the U.S. Justice Department is planning a lawsuit to block the company’s $20 billion acquisition of startup Figma.
A case could come as soon as next month, Bloomberg reported, citing an unnamed source.
The deal, announced in September, would help Adobe spur fast growth to its portfolio and pick up technology that could enhance existing programs in the Creative Cloud bundle that businesses and independent designers use. Adobe has said Figma would generate over $400 million in annualized recurring revenue in 2022.
But in buying Figma, which companies use to design apps and websites and collaborate on ideas, Adobe would also be taking a rising competitor off the market. Adobe, which has offered the XD software-design tool that ha
Competition authorities in the U.S. have become more willing to take a hard line on large companies’ efforts to expand. In December, the U.S. Federal Trade Commission filed a lawsuit attempting to stop Microsoft from acquiring video game publisher Activision Blizzard for nearly $69 billion.
“The combination of Adobe and Figma will deliver significant value to consumers, advance new product categories and technologies and create new market opportunities, and we’ve been delighted to hear from customers across the design space who tell us they are excited about the benefits the transaction will unlock,” an Adobe spokesperson told CNBC in an email.
“Adobe and Figma focus on very different product areas today. Figma is a leader in interactive product design, focused on building a collaborative web platform. Adobe is a leader in the creative tools space, helping millions of users create amazing visual content. Together, our vision will help enable millions of consumers to transform their productivity with creativity. We are engaged in constructive and cooperative discussions with regulators in the US, UK and EU, among others,” the spokesperson said in the email.
David Wadhwani, president of Adobe’s digital media business and a key figure in the Figma deal, told analysts on a conference call in December that “the regulatory process is proceeding as expected.” Adobe was busy with the Justice Department’s second request process as the federal agency examined the deal, he said.
The Justice Department declined to comment.
Adobe still expects to close the Figma deal in 2023, the spokesperson said.
Adobe stock slips on report saying DOJ plans suit to block Figma deal (cnbc.com) |
