More than a year later, the $20B Adobe-Figma deal is still stuck in regulatory limbo

Anton Ioffe - October 30th 2023 - 5 minutes read

In a digital environment where business transactions often wrap up at lightning speed, the protracted $20B Adobe-Figma deal continues to turn heads. Igniting a discourse that extends beyond mere business investment, it's become symbolic of the tug of war between technological innovation and regulatory scrutiny. In this deep-dive, we'll wade through the murky waters of this corporate saga, unearthing the roots of this partnership, charting their journey through regulatory labyrinth, identifying the hurdles that are stalling conclusions, and visualizing potential after-effects of the seemingly stuck-in-limbo deal. Could this unprecedented delay signal a seismic shift in the regulatory landscape, or is this just another complex business manoeuvre? Let's embark on the exploration right away.

The Foundation of Adobe-Figma Deal

In September 2022, Adobe announced its plan to acquire Figma for an impressive $20 billion, a move that sparked widespread interest in the tech sector. Remarkably, this represented a significant premium on Figma's recent valuation, which was only half of that figure. While the deal held the potential for substantial financial windfalls for Figma's investors and employees, it also had to contend with the scrupulous scrutiny of regulatory authorities.

While the deal held significant financial implications, Adobe’s consideration was about more than just eliminating a key competitor — it was about incorporating a value-adding entity into its comprehensive portfolio of offerings. Meanwhile, Figma viewed the deal as a unique opportunity to align itself with a tech giant, gain greater exposure, and further expand its potential. Despite speculation about Adobe flexing its market power, both companies spent significant time clarifying to the regulatory bodies that the arrangement was not designed to quash competition but to generate mutual advancement.

Figma, despite the deal’s regulatory limbo, remained undeterred and focused on improving its platform continuously. The company displayed its commitment to innovation and growth by onboarding 500 new talents since the deal was announced, bringing its total workforce to 1,300. Figma even hosted the Config conference in June, sweeping more than 8,000 participants off their feet and introducing a new developer mode for its tool. This consistent stride towards growth and innovation, even under uncertain circumstances, stands to further enhance Figma's appeal to Adobe. All in all, the proposed Adobe-Figma deal aims to foster synergic benefits for both parties rather than simply being about financial leverage or dominating the market competition.

Sweating through the Regulatory Review Process

The Adobe-Figma marriage is stuck in a protracted limbo, precipitated by the slow and complex nature of regulatory assessments. Upon announcement, this ambitious merger immediately sparked the interest of regulatory bodies worldwide due to its potential impact on market competition. Adobe and Figma indeed had a busy year, engaging in numerous discussions with these overseers about the competitive implications of their proposed union. Whether seen as a strategic move by Adobe to remove its rival from the chessboard or merely adding to their product roster, it's clear that these regulators have a crucial role in dictating the future of this deal.

Amid the regulatory maelstrom, the two entities have been mandated to operate independently, cutting off any direct communication. This however did not deter Figma from sharing speculative thoughts on what possible collaborations could look like, noting Adobe's addition of the generative AI offering, Firefly, to the Creative Cloud. Interestingly, while in suspension, both companies explored their standalone potential and navigated the complicated landscape while under the scrutinizing glare of regulators.

Consequently, the journey of the deal through the regulatory machine continues, over a year after its announcement. The persisting review of these filings leaves the transaction in a peculiar suspended animation, with the decision by various agencies shaping its eventual fate. Whatever the outcome, this pronounced delay showcases the intense process of regulatory scrutiny and the significant influence such bodies possess. It's a tense waiting game and the question remains, will the Adobe-Figma deal ever see the light of day?

The Roadblocks Derailing the Deal

At the heart of the hurdles surrounding the Adobe-Figma deal is the sheer scale of the transaction itself. The proposed acquisition, a prominent financial landmark, has garnered substantial attention and debate within the industry. The peculiarity arises from the fact that a startup, valued at approximately half the offered purchase price, stands at the center of this proposed transaction. Providing a challenge for regulators, such a deal necessitates meticulous scrutiny. Thus, the financial magnitude forms a substantial part of the factors slowing down the deal's finalization.

The approval process is further complicated by the potential implications on the tech market. Large-scale agreements of this nature necessitate rigorous reviews to ensure that principles of fair market dynamics are upheld. In particular, the potential market repercussions of such a sizable acquisition cannot be overlooked. Consequently, the financial scale of this acquisition contributes significantly to the regulatory hurdles delaying the deal's conclusion.

Further extending this delay is the nature of their businesses. Given that Adobe and Figma are major players in the digital design sector, their consolidation could potentially reshape this industry's landscape. Such changes are not confined within regional borders. As such, the implications stretch beyond local trade regulations, presenting a global scope of considerations. A meticulous examination of all these factors, therefore, constitutes a necessary and integral part of the approval process for this deal.

Potential Implications of the Deal Outcome

The resolution of the Adobe-Figma deal recasts not just the future of the two companies but also the landscape of the digital design industry. If regulators greenlight the acquisition, it becomes a testament to Adobe's argument that the merger bolsters rather than stifles competition. Adobe can then integrate Figma's workforce and, possibly, its technology into its suite of tools, providing an enhanced experience for its user base and a stronger foothold for Adobe in the business software scene. For Figma, assimilation into Adobe implies potential access to an enormous customer base and the ability to command greater resources, facilitating more comprehensive development efforts. However, critics worry that this might give Adobe an undue advantage, thereby compromising market competitiveness.

Should the merger face rejection, Adobe must either find another partner to fill its perceived hole in its product line or ramp up its in-house capabilities. As for Figma, the rebuff could be a setback, albeit temporary. Still an independent player, the company would be free to pursue other alliances, continue expanding its workforce, and independently hone its product offerings. A failed deal might even boost Figma's public image, propagating its narrative of being a standalone force in the industry. While maintaining status quo, this result would fan the flames of innovation, urging both entities to outperform each other.

Regardless of the approval or rejection of the deal, the industries of software and digital design would witness substantial ripple effects. An approved merger could trigger an increase in mega-deals, possibly leading to the rise of more dominant tech giants and altering the business software market's ecosystem. On the other hand, a rejected deal may cause a chilling effect on tech mergers, making regulatory clearance an even higher hurdle to clear than it is today. Amidst these uncertainties though, lies an indisputable fact - the outcome of the Adobe-Figma deal presents itself as a demonstrative precedent, setting the tone for future tech acquisitions and their dance with regulatory bodies.


The $20B Adobe-Figma deal has been stuck in regulatory limbo for over a year, sparking a debate on the balance between innovation and regulation. Despite the delay, Figma remains committed to growth and innovation, while both companies have explored their standalone potential. The deal's prolonged review highlights the influence of regulatory bodies and the challenges posed by the scale and potential market implications of the acquisition. The outcome of the deal will not only impact the future of the two companies but also reshape the digital design industry, potentially leading to more mega-deals or increased regulatory scrutiny.

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