Adobe slips on report saying DOJ plans suit to block $20 billion Figma deal

Adobe shares fell arsenic overmuch arsenic 5% successful extended trading pursuing a study that said the U.S. Justice Department is readying a suit to artifact the company's $20 cardinal acquisition of startup Figma.

A lawsuit could travel arsenic soon arsenic adjacent month, Bloomberg reported, citing an unnamed source.

The deal, announced successful September, would assistance Adobe spur accelerated maturation to its portfolio and prime up exertion that could heighten existing programs successful the Creative Cloud bundle that businesses and autarkic designers use. Adobe has said Figma would make implicit $400 cardinal successful annualized recurring gross successful 2022.

But successful buying Figma, which companies usage to plan apps and websites and collaborate connected ideas, Adobe would besides beryllium taking a rising rival disconnected the market. Adobe, which has offered the XD software-design tool that has failed to generate important revenue, plays a large relation successful the plan bundle market.

Competition authorities successful the U.S. person go much consenting to instrumentality a hard enactment connected ample companies' efforts to expand. In December, the U.S. Federal Trade Commission filed a lawsuit attempting to halt Microsoft from acquiring video crippled steadfast Activision Blizzard for astir $69 billion.

"The operation of Adobe and Figma volition present important worth to consumers, beforehand caller merchandise categories and technologies and make caller marketplace opportunities, and we've been delighted to perceive from customers crossed the plan abstraction who archer america they are excited astir the benefits the transaction volition unlock," an Adobe spokesperson told CNBC successful an email.

"Adobe and Figma absorption connected precise antithetic merchandise areas today. Figma is simply a person successful interactive merchandise design, focused connected gathering a collaborative web platform. Adobe is simply a person successful the originative tools space, helping millions of users make astonishing ocular content. Together, our imaginativeness volition assistance alteration millions of consumers to alteration their productivity with creativity. We are engaged successful constructive and cooperative discussions with regulators successful the US, UK and EU, among others," according to the email.

David Wadhwani, president of Adobe's integer media concern and a cardinal figure successful the Figma deal, told analysts connected a league telephone successful December that "the regulatory process is proceeding arsenic expected." Adobe was engaged with the Justice Department's 2nd petition process arsenic the national bureau examined the deal, helium said.

The Justice Department declined to comment.

Adobe inactive expects to adjacent the Figma woody successful 2023, the spokesperson said.

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