Over a year has passed, and the $20 billion Adobe-Figma deal remains mired in regulatory uncertainty

Adobe made headlines by announcing its intention to acquire Figma for $20 billion, a substantial sum for a startup previously valued at half that amount. This deal had the potential to make investors and certain Figma employees immensely wealthy, but it faced regulatory hurdles that proved to be challenging.

Over 13 months later, the two companies still exist independently, and Figma hasn’t been sitting idly, with significant progress on its platform and hiring 500 new employees since the announcement, bringing its total workforce to 1,300. Figma hosted the Config conference, where it unveiled a new developer mode, potentially making it even more appealing to Adobe.

When the deal was initially disclosed, questions arose about whether Adobe was eliminating a key competitor through sheer market power or filling a gap in its product lineup. Regulators were tasked with making this determination, and both Adobe and Figma engaged in extensive discussions with regulatory bodies worldwide to demonstrate that the deal was not anticompetitive.

Although the two companies couldn’t communicate during this process, Figma speculated on what it would be like if they joined forces in a blog post, especially since Adobe had incorporated Firefly, its generative AI offering, into the Creative Cloud.

Ultimately, the decision rests with the regulators who are still reviewing the filings more than a year later, leaving the deal in a state of uncertainty. The outcome of these regulatory reviews will determine whether Adobe and Figma remain separate entities or unite with a significant financial transaction.

The delay in this deal is due to its status as a high-profile acquisition involving two companies perceived as competitors with significant market influence. Regulatory bodies in the U.S., the EU, and the U.K. have been involved in the review process, and they are taking longer than usual to decide whether to oppose the deal through legal action.

Adobe believes the deal is not anticompetitive, viewing Figma as an adjacent rather than an integral part of the Creative Cloud. They intend to run Figma as a separate entity and offer it independently from the Creative Cloud.

The European Union is expected to conclude its investigation on February 5, while the investigations by the Competition and Markets Authority (CMA) and the Department of Justice are ongoing.

The debate surrounding this deal revolves around whether the two companies are more valuable together or apart. Adobe remains committed to the deal, and experts believe that it is still attractive to the company, given Figma’s significance in the design market.

If the deal were to fall through, it would be a significant loss for Adobe, as Figma remains a leader in the design space, and Adobe would need to find an alternative solution to fill the gap. However, it also raises concerns about monopolistic tendencies in the market.

In the end, the regulators will need to determine whether the benefits of the deal outweigh its potential negative effects. Adobe is dedicated to pursuing the deal and working diligently to make it a reality.