Adobe’s $20 billion bid for cloud-based design platform Figma will now be subject to an in-depth investigation by the UK’s competition watchdog, which will decide whether to approve the merger or block the deal. completely.
The Competition and Markets Authority (CMA) Announced on Thursday that it had referred the acquisition for a “phase two” investigation, a longer and more intensive evaluation by an independent CMA panel, after Adobe and Figma informed the regulator that they would not provide resolutions to address concerns that the merger cause a “substantial decrease in competition” for designers in the UK.
The CMA has until December 27 to conclude the second phase of its investigation.
Following its initial “phase one” investigation last month, the CMA concluded that the acquisition would remove a “significant competitive threat to Adobe” given the similarities between Figma and Adobe’s all-in-one product design software, Adobe XD. The watchdog gave the companies a deadline of July 7, just five working days from the announcement, to offer “acceptable compromises” that could have allowed the merger to go ahead without further scrutiny. The CMA has now set a legal deadline of December 27 to conclude the second phase of its investigation.
Dana Rao, Adobe General Counsel and Trust Director, has provided the following statement to the edge in response to the CMA decision:
We remain confident in the merits of the case as Figma’s product design is an adjacency to Adobe’s core creative products and Adobe has no significant plans to compete in the product design space. We look forward to establishing these facts in the next phase of the process and successfully completing the transaction. As demonstrated in our recent strong second-quarter earnings, Adobe continues to act on a massive market opportunity of more than $200 billion and deliver breakthrough innovations and industry-leading AI capabilities across all of our products.