Adobe CEO Shantanu Narayen
Mark Neuling | CNBC
Adobe shares fell as much as 5% in extended trading after a report said the U.S. Justice Department planned to file a lawsuit to block the company $20 billion acquisition Figma launch.
The case could come as soon as next month, Bloomberg he stated, citing an unnamed source.
The deal, announced in September, will help Adobe accelerate the rapid growth of its portfolio and acquire technology that could enhance existing programs in the Creative Cloud suite used by businesses and independent designers. Adobe said Figma will generate more than $400 million in annual recurring revenue by 2022.
But by buying Figma, which companies use to design apps and websites and collaborate on ideas, Adobe would also remove a growing competitor from the market. Adobe, which offered XD software design tool It has failed to generate considerable revenue, plays a major role in the design software market.
US competition authorities are more willing to take a tough line on big companies’ expansion efforts. In December, the US Federal Trade Commission filed a lawsuit trying to stop Microsoft since the acquisition of the video game publisher Activision Blizzard for almost 69 billion dollars.
“The combination of Adobe and Figma will bring significant value to consumers, advance new product and technology categories, and create new market opportunities, and we are delighted to hear from customers across the design space who tell us they are excited about the benefits the transaction will unlock,” he said an Adobe spokesperson told CNBC in an email.
“Adobe and Figma today focus on very different product areas. Figma is a leader in interactive product design focused on building a common web platform. Adobe is a leader in creative tools that help millions of users create amazing visual content. Together, our vision will help millions of consumers transform their productivity with creativity. We are engaging in constructive and cooperative discussions with regulators in the US, UK and EU, among others,” the spokesperson said in an email.
David Wadhwani, president of Adobe’s digital media division key character in the deal, Figma told analysts on a conference call in December that “the regulatory process is proceeding as expected.” Adobe was busy processing the Justice Department’s second request as the federal agency reviewed the deal, he said.
The Justice Department declined to comment.
Adobe still expects to close the Figma business in 2023, the spokesperson said.
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