Adobe's Figma Deal Battles Regulatory Headwinds

  • Adobe Inc ADBE received a second request for information from the U.S. Department of Justice on its proposed $20 billion acquisition.
  • The deal, one of the largest takeovers of a private software maker, has a targeted completion in 2023
  • Adobe, the top creative software maker for design professionals, is looking to expand its web-based offerings to make inroads with nonprofessional customers and small businesses. 
  • Also Read: Microsoft Battled Barrage Of EU Antitrust Complaints; From Unfair Licensing Practices To Activision Blizzard Acquisition
  • In recent years, that market has gravitated to web-native companies such as San Francisco-based Figma, Canva Inc, and Lightricks Ltd, Bloomberg reports.
  • The DOJ asked Adobe and Figma to provide additional information on the deal, known as a second request. 
  • The action means regulatory approval for the deal cannot come until at least 30 days after Adobe and Figma fulfill the request, the DOJ ends its review, or the parties agree to an extension, the companies said.
  • Figma is used to prototype and design interfaces for apps and websites and has built a devoted customer base due to its highly collaborative system, freemium pricing, and lightweight interface.
  • While it has trounced Adobe's rival XD offering in recent years, Adobe argued that Figma is not a meaningful competitor.
  • Wall Street analysts criticized the purchase price, and investors also seem wary.
  • NVIDIA Corp's NVDA deal to acquire British chip designer Arm Ltd from SoftBank Group SFTBY SFTBF fell prey to regulatory objections.
  • Price Action: ADBE shares closed lower by 0.17% at $337.83 on Thursday.
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