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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteAdobe did not acquire Figma. Adobe and Figma mutually terminated their proposed approximately $20 billion merger on December 18, 2023, after about 15 months of regulatory review. Adobe paid Figma a contractual $1 billion reverse termination fee after the companies concluded there was no clear path to approval from the European Commission and the UK Competition and Markets Authority (CMA).
What happened to Adobe’s Figma acquisition?
The proposed acquisition ended before closing. Adobe and Figma jointly agreed to terminate their merger agreement rather than continue pursuing regulatory approval.
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The transaction, announced on September 15, 2022, would have valued Figma at approximately $20 billion, with consideration consisting of roughly half cash and half Adobe stock. No $20 billion purchase payment changed hands because Adobe never acquired the company.
Adobe instead paid Figma the agreed $1 billion reverse termination fee. That amount was approximately 5% of the proposed transaction value, although it was a contractual payment for the failed merger—not the purchase price for Figma.
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Adobe described the decision in its termination announcement as a mutual agreement reached after the companies determined that they could not see a clear path to obtaining the necessary approvals from the European Commission and the UK CMA.
Was Adobe’s deal for Figma blocked?
Not in the narrow legal sense. No court issued an injunction blocking the acquisition, and the transaction was not terminated after a final prohibition order.
The more precise description is that the companies terminated the deal after sustained regulatory opposition and concluded that approval was unlikely. The distinction matters:
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- Approval deadlock: Adobe and Figma concluded there was no clear path to satisfy the key regulators.
- Formal prohibition: The transaction never reached a final legal ban before the parties ended it.
- U.S. litigation: The U.S. Department of Justice investigated the deal but did not win a court judgment blocking it.
The UK CMA subsequently canceled its merger inquiry on December 18, 2023, following termination of the agreement.
Why did regulators oppose the merger?
The central concern was not simply that Adobe and Figma sold identical products. Regulators examined whether Adobe would remove an important independent and rapidly growing competitor in collaborative product-design software.
Figma had become a major platform for browser-based interface design, prototyping, design systems, developer handoff and cross-functional collaboration. Adobe already had substantial strength across professional creative software, including products such as Photoshop and Illustrator.
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Regulators therefore considered whether buying Figma could reduce current and future competition, even if the companies described their products as complementary rather than direct substitutes.
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The UK CMA’s concerns
In its provisional findings, the CMA said the transaction could harm competition and innovation in software used by digital designers. The regulator viewed Figma as an important competitive constraint on Adobe.
The CMA also raised the relevance of Adobe XD, Adobe’s own product-design and prototyping tool. According to the regulator’s provisional findings, Adobe had stopped developing new product-design software that could compete more closely with Figma, and the timing could be connected to the proposed merger.
That was a regulatory theory and provisional finding—not a court-established fact. Its importance was strategic: the CMA was considering whether Adobe’s acquisition would remove one of the few credible alternatives to its existing creative-software portfolio.
The European Commission’s analysis
The European Commission opened formal proceedings in August 2023. Its competition analysis considered possible effects in areas including:
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- Digital asset creation and management.
- Creative-software ecosystems.
- Innovation and future competition.
- Figma’s role as a competitive threat to Adobe’s products.
The Commission’s approach reflected a broader antitrust question: should regulators protect only current head-to-head competition, or also a fast-growing company that could become a more significant rival over time?
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Regulatory timeline
| Date | Event |
|---|---|
| September 15, 2022 | Adobe announces its proposed approximately $20 billion acquisition of Figma. |
| July 13, 2023 | The UK CMA refers the transaction to an in-depth Phase 2 investigation after finding possible substantial harm to competition. |
| August 2023 | The European Commission opens formal proceedings. |
| Late 2023 | The CMA and European Commission maintain significant objections; the U.S. DOJ is also scrutinizing the deal. |
| December 18, 2023 | Adobe and Figma mutually terminate the merger agreement. Adobe pays Figma the $1 billion reverse termination fee. |
Figma described the process as lasting approximately 15 months. The companies specifically identified the UK and European regulatory processes as the obstacles for which they could no longer see a clear approval path.
What did Adobe and Figma say?
Adobe and Figma disagreed with the regulators’ conclusions. Their argument was that the companies’ products and strengths were complementary:
- Adobe offered a broad creative-software ecosystem and global scale.
- Figma offered browser-based collaboration and product-design workflows.
- A combination could connect creative tools, prototyping, productivity and collaboration features.
- The merged company could invest more heavily in innovation and serve customers across more workflows.
Both companies ultimately said that continuing independently was in their respective interests. They left open the possibility of working together in the future, subject to competition law and any applicable contractual restrictions.
What happened to Adobe XD?
Adobe XD was Adobe’s product-design and prototyping competitor to Figma. The CMA’s provisional findings made Adobe XD relevant because the regulator argued that Adobe had abandoned development of new product-design software that might have competed more closely with Figma.
That claim should be understood as part of the CMA’s case, not as an undisputed finding that Adobe intentionally eliminated a competitor. The broader issue was whether Adobe’s existing position and product decisions made Figma especially important as an independent source of competitive pressure.
What did the failed deal cost?
The clearest direct cost was the $1 billion termination fee. It compensated Figma under the merger agreement after the transaction ended without the required regulatory approvals.
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For Adobe, the outcome had two opposing financial effects:
- Adobe paid $1 billion and spent roughly 15 months pursuing a transaction that did not close.
- Adobe avoided paying the proposed approximately $20 billion acquisition price and did not issue the planned stock consideration or take ownership of Figma.
The failed merger also carried strategic costs. Adobe lost the opportunity to add Figma’s collaborative product-design platform to its ecosystem, while Figma lost the proposed acquisition outcome and the opportunity to operate inside Adobe.
Figma employees and investors were affected by the loss of the expected transaction, although the available facts do not establish individual payout amounts or investment returns.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What does the termination mean for Figma and Adobe customers?
Because the acquisition never closed, Figma remained independent. Adobe did not acquire Figma’s files, user accounts or infrastructure, and customers were not required to migrate between the services.
Adobe users did not automatically receive Figma through Creative Cloud. Figma users did not automatically receive Photoshop, Illustrator or other Adobe applications through their Figma plans.
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For design and product teams, the practical result was that Adobe had to compete with Figma rather than absorb it. Customers retained choices including Figma, Adobe’s tools, Sketch, Penpot and other design platforms.
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What the deal means for technology antitrust
The case became a prominent example of regulators scrutinizing acquisitions of fast-growing technology companies by larger incumbents. It demonstrated why merger review can focus on more than current market-share calculations.
Agencies may also examine:
- Whether a smaller company is a nascent or potential competitor.
- Whether the transaction would reduce innovation.
- Whether an incumbent could bundle products across a broad ecosystem.
- Whether internal competing products have been weakened or discontinued.
- Whether proposed behavioral commitments would preserve meaningful competition.
Possible remedies in a case like this could include licensing commitments, interoperability or data-portability requirements, restrictions on bundling, continued support for a separate product, or divestiture of overlapping assets. The regulatory record included discussion of structural remedies, including possible divestiture, but the final termination announcement did not identify an accepted remedy package.
The outcome does not establish that every large technology acquisition of a startup will be prohibited. It does show that a buyer may face substantial regulatory risk when the target is an important source of future innovation, even where the parties argue that their products occupy different markets.
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What should buyers choose now?
The failed merger did not make Adobe and Figma interchangeable. They serve overlapping but different needs.
| Product | Best suited to | Important consideration |
|---|---|---|
| Figma | Browser-based collaborative product design, prototyping, design systems and developer handoff. | Pricing depends on plan and seat type. Official materials list a free Starter plan and, for annual billing, Organization Full seats at $55 per month and Enterprise Full seats at $90 per month. Dev, Collab and View access have different terms. |
| Adobe Creative Cloud | Professional creative work across Photoshop, Illustrator, InDesign, Premiere and the broader Adobe ecosystem. | Adobe’s U.S. pricing page listed Creative Cloud Pro at $69.99 per month on an annual, billed-monthly individual plan as of August 16, 2026. Plans vary by region, customer type and promotion. |
| Sketch | Mac-centered interface design and prototyping with browser-based collaboration. | Sketch lists Standard at $12 per editor per month, Professional at $24 and Enterprise at $44 when billed yearly. A $120 Mac-only license is also listed, but it excludes collaborative features, online document sharing and iOS previewing. |
| Penpot | Teams exploring an open and collaborative product-design alternative. | Penpot has an official pricing page, but plan details should be checked directly before purchase. |
These are U.S. list-price signals observed on August 16, 2026, not universal costs. Taxes, promotions, billing commitments, geography, seat types and enterprise negotiations can materially change the final price. Check the vendors’ current pages before making a purchase:
- Figma product information and Figma pricing.
- Adobe Creative Cloud pricing.
- Sketch pricing.
- Penpot pricing.
The bottom line
Adobe and Figma ended their proposed approximately $20 billion merger on December 18, 2023—not because a court directly blocked it, but because regulatory objections made approval appear unattainable. Adobe paid Figma a $1 billion contractual termination fee, Figma remained independent, and Adobe continued competing in a market where regulators had identified Figma as an important current and potential source of competition.
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