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UK probes Adobe’s $20bn bid for Figma

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The UK Competition Commission has begun an investigation into Adobe’s proposed $20 billion acquisition of design software business Figma.

This is its second examination of a technology merger, following its rejection of Microsoft’s buyout of Activision Blizzard, the Call of Duty maker.

The Competition and Markets Authority is the first regulator to officially initiate an investigation into the agreement, but similar action is expected from the United States and the European Union.

The investigation was initiated on Wednesday, about nine months after Adobe announced its acquisition of San Francisco-based Figma, a creative tool that allows designers to work online.

Adobe said on Wednesday that it expected “lengthy reviews of transactions” in the “current robust regulatory environment” and that it was in talks with regulators in Brussels, the United States, and the United Kingdom.

Adobe stated that it looks forward to “continuing to engage in productive discussions with the Department of Justice, CMA, and European Commission as they conduct their reviews about the businesses, markets, and positive economic impacts this deal will bring.”

Adobe chair and CEO Shantanu Narayen stated the merger would be “transformational” when it was announced.

The over $20 billion purchase price was more than quadruple the amount Figma was valued at in its most recent private investment round in 2021 and ten times its valuation in 2019.

The bid was 50 times the company’s yearly recurring revenue.

The acquisition was the most expensive bid for a private firm at the time, surpassing Facebook’s $19 billion takeover of WhatsApp in 2014.

According to Financial Times, both Adobe and Figma have provided information to the US Department of Justice while the government considers whether to initiate formal antitrust actions.

The CMA’s announcement comes just a week after it banned Microsoft’s $75 billion acquisition of Activision Blizzard, highlighting its firm position on major transactions that it perceives as a threat to competition.

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