The European Union is looking into an antitrust investigation of Adobe’s $20 Billion acquisition of Figma, the popular design tool.
Driving The News
According to insiders, European antitrust regulators are preparing to launch a formal investigation into the acquisition later this year, over concerns the transaction will lead to less innovation and higher prices.
The Details
EU authorities are looking to push what is referred to as a to push forward with a “phase 2” investigation, which could take many more months and may ultimately derail the deal altogether.
Normally, large acquisition investigations in the EU go through a “phase 1” period which takes only a few months to complete.
What They’re Saying
“Adobe is trying to buy a credible competitor,” said a person with direct knowledge of the thinking of EU regulators. “It’s bad.”
The European Commission said: “This transaction has not been formally notified to the Commission. If a transaction constitutes a concentration and has an EU dimension, it is always up to the companies to notify it.”
Adobe said it was still in preliminary discussions with regulators in the EU, the UK and the US but that it remains “confident in the merits of the case and looks forward to successfully completing the transaction”.
The Bigger Picture
Adobe’s offer for Figma values the company at 50 times its annual recurring revenue. The $20bn price tag was double the amount at which the company was valued in a private funding round in 2021, and a tenfold increase compared with its 2019 valuation.
Source: Financial Times
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