Adobe's $20 Billion Figma Deal and the $1 Billion Exit

On September 15, 2022, before the opening bell on Nasdaq, Adobe announced that it had agreed to buy Figma for approximately $20 billion in cash and stock. It was the largest acquisition Adobe had ever attempted, roughly fifty times the annual recurring revenue Figma expected to exit that year with, and double the valuation Figma's own investors had set fifteen months earlier. Adobe's shares fell about 17% the same day, their worst session since 2010, erasing close to $30 billion of market value on a day the company had also beaten its earnings estimates.

Fifteen months later the deal was dead. On December 18, 2023 the two companies announced a mutual termination and Adobe wired Figma $1 billion in cash. No court had enjoined the transaction, no regulator had issued a final prohibition, and the two authorities that killed it, the UK Competition and Markets Authority and the European Commission, were each still weeks away from a formal decision. What they had published was enough: provisional findings of a substantial lessening of competition in product design software, and a preliminary conclusion in Brussels that the deal was a reverse killer acquisition designed to remove a rival Adobe could not beat.

The aftermath is what makes the case genuinely hard rather than merely instructive. Figma listed on the New York Stock Exchange in July 2025 at $33 a share and closed its first day at $115.50, briefly worth roughly three times what Adobe had agreed to pay. Thirteen months later the stock was at $27.49, and Figma was worth less in the public market than Adobe's rejected offer. The question worth working through is therefore not whether Adobe overpaid. It is what the price was actually for, whether the potential competition the regulators protected has since materialized, and which side of a failed reverse termination fee ended up carrying the risk.

Figma did not sneak up on Adobe. The two companies had been circling each other for years, and the regulatory record that eventually killed the deal was built almost entirely out of documents both sides had written before anyone thought a merger notice would ever be filed.

From a Brown Dorm Room to Eighty Percent of a Market

Dylan Field and Evan Wallace founded Figma in 2012, Field having left Brown University on a Thiel Fellowship. The product's insight was architectural rather than aesthetic: design files would live in the browser, multiple people would edit the same file at the same time, and the artifact everyone argued over would be a URL rather than an attachment. That made collaboration the product rather than a feature bolted onto one, and it is why engineers, product managers and executives ended up inside a tool that had been sold to designers.

The commercial results were the kind that make an acquirer nervous. Figma closed a $200 million Series E in June 2021 led by Durable Capital Partners and Morgan Stanley's Counterpoint Global at a $10 billion valuation, at an issue price of $21.2967 per preferred share. By the time Adobe announced the deal, Figma expected to add roughly $200 million of net new annual recurring revenue in 2022 and to exit the year above $400 million in total ARR, with net dollar retention above 150%, gross margins near 90% and positive operating cash flow.

Net dollar retention

Net dollar retention measures what happens to revenue from a cohort of existing customers over twelve months, after upgrades, downgrades and churn, and before any new customers are counted. A figure of 100% means the existing base is flat. Figma's reported figure above 150% meant that even with no new customer at all, revenue would have grown by more than half, because teams that adopted the product kept adding seats. In software M&A that number often does more to justify a headline multiple than the growth rate itself.

The scale of the resulting position is what regulators eventually fixed on. In its provisional findings the CMA put Figma Design at over 80% of the global market for all-in-one product design software for professional users by revenue, with Adobe XD at 5% to 10% and every remaining competitor at 0% to 5%. Together the two parties held more than 90% of a market that, on any conventional screen, would have been a straightforward horizontal problem.

Project Spice, and What Adobe Canceled Six Days Before Signing

Adobe's public position, then and later, was that XD was not a meaningful force and that Adobe had effectively withdrawn from product design. The CMA's reconstruction of the internal record told a different story, and it is the single most damaging sequence in the case.

Adobe had been building a next-generation, web-based product design tool internally under the name Project Spice, conceived as a significant improvement on XD and intended to fold Illustrator and Photoshop capability into a browser-based app with real-time collaboration. In October 2021 and again in February 2022, Adobe cut engineering resources from XD and moved them onto Spice in order to accelerate it. XD itself was placed in maintenance mode in February 2022.

Then the timing turned awkward. In late July 2022, one week after Adobe and Figma signed an exclusive letter of intent, Adobe reduced the scope of Project Spice, a program that had been in development for more than two years. On September 9, 2022, six days before the merger was announced, Adobe canceled it outright.

Three Approaches, One Bidder, and a Price That Never Moved

The negotiation history disclosed in Adobe's registration statement is unusually clean, and it explains a great deal about the price. Field had turned Adobe down twice, once after meeting chief product officer Scott Belsky in early 2020 and again after meeting chairman and chief executive Shantanu Narayen in early 2021. The conversation that led to a deal began on April 20, 2022, when Belsky and David Wadhwani, president of Adobe's Digital Media business, asked Field whether he would discuss an acquisition. A confidentiality agreement followed on May 5.

Adobe delivered a non-binding indication of interest on June 19, 2022 at $20 billion, roughly half cash and half stock, with a retention equity pool of up to about $2 billion. Figma's board, advised by Qatalyst Partners, had directed Field to approach exactly one alternative buyer, a publicly traded technology company identified in the filing only as Party A. Party A withdrew on June 20, the day after Adobe's offer landed. Figma countered on June 30 at $23 billion with a $3 billion retention pool. Adobe refused to raise the price, offered a larger retention pool instead, and on July 5 and again on July 6 told Figma through Wadhwani and then Narayen that $20 billion was firm.

That refusal, restated three times inside a fortnight, frames everything downstream. There was no auction, no interloper and no competitive tension. Figma's board concluded in July that pressing further would probably cause Adobe to walk, accepted the number, and spent its remaining negotiating capital on structure instead. What it won there mattered more than anyone expected at the time.

The consideration repays close reading, because the headline number bundles together three economically distinct things: cash, a fixed slug of Adobe equity, and a compensation program that was never a payment to selling shareholders at all.

The Per-Share Mechanics Behind the Headline

Under the merger agreement, each share of Figma capital stock converted into $22.4795 in cash, before customary adjustments and escrow holdbacks, plus 0.045263 shares of Adobe common stock. For the purpose of netting option exercise prices, the agreement deemed each Figma share to be worth $40.1711. On that basis the cash leg alone was roughly 56% of the per-share value, which is what "approximately half cash and half stock" meant in practice. The price was struck on a cash-and-debt-free basis net of transaction expenses, with no working capital adjustment.

Two features of that table do real work. The first is that the retention pool sat outside the $20 billion: Adobe granted approximately six million restricted stock units vesting over four years to a jointly selected subset of Figma employees, of which roughly half, more than $1 billion at announcement, went to Field alone. Reported as compensation expense rather than purchase consideration, it is invisible in the headline and unavoidable in any honest calculation of what Adobe was spending.

The second is the fixed exchange ratio. Figma had asked, in its July 5 counterproposal, for a collar that would have adjusted the stock leg by 10% if Adobe's shares moved 10% or more before closing. Adobe refused on July 14, and the final agreement valued the stock consideration off Adobe's average ten-day closing price through September 13, 2022, with no collar at all.

Fixed exchange ratio

In a fixed-exchange-ratio stock deal, the seller receives a set number of acquirer shares rather than a set dollar value, and therefore carries the acquirer's price risk in both directions between signing and closing. A collar limits that exposure by adjusting the ratio if the buyer's stock moves beyond agreed bounds. Figma asked for one and did not get it, so when Adobe fell about 17% on announcement day, the stock half repriced immediately and the deal was worth materially less than $20 billion before it was a day old.

Fifty Times ARR in the Year Software Multiples Halved

The valuation objection was arithmetic, not aesthetic. At roughly $400 million of exiting ARR, the $20 billion price was about fifty times a forward revenue run rate, struck in a market where forward multiples for public cloud software had compressed from roughly twenty-five times in February 2021 to a little over nine times. Figma's own investors had marked it at $10 billion in June 2021, at the top of the cycle; Adobe was paying double that fifteen months later, into the teeth of a repricing.

Investors reacted to the ARR multiple and to the relative arithmetic underneath it. Adobe was committing roughly 11% of its own market capitalization for a business that would add a low-single-digit percentage to its revenue, and it was doing so in a currency, its own shares, that it was implicitly saying was cheap enough to spend. The stock fell about 17%, its worst day in twelve years, on a session when Adobe had also reported adjusted earnings of $3.40 per share against a $3.33 consensus. The market's verdict was delivered before a single regulator had opened a file.

Adobe's defense was that this was not a revenue purchase. Narayen called the combination transformational for Adobe's vision of collaborative creativity, and the company framed Figma as the entry point to an opportunity it sized at $16.5 billion by 2025, with Field continuing to run the business under Wadhwani. Whether that was a growth thesis or an expensive way to retire a threat is exactly the question regulators went on to answer differently.

The Billion-Dollar Fee Figma Asked For, and Got in Fifteen Days

The most consequential term Figma negotiated was not the price. It was the reverse termination fee, which Figma introduced in its July 5 counterproposal, which Adobe accepted in principle on July 14 with the amount left open, and which was fixed at $1 billion in Adobe's July 20 proposal, the same day the two sides executed exclusivity.

The trigger mechanics are worth stating precisely, because they explain how the deal actually ended. The fee became payable within three business days if either party terminated because closing had not occurred by the outside date of September 15, 2023, subject to extension, or because a final non-appealable antitrust restraint was in effect, and if at the time of termination the antitrust conditions were the only ones outstanding. Nothing else triggered it.

Reverse termination fee

A reverse termination fee runs from buyer to seller and compensates a target for the time its business spent frozen inside a deal that did not close. On large transactions with obvious regulatory exposure it is usually sized between 3% and 8% of equity value; the mechanics and the negotiation traps are set out in our guide to break-up and termination fees. At $1 billion on a $20 billion deal, Adobe's fee was 5%, squarely in the market range and not obviously light. What a fee of any size cannot compensate is the option value a private company gives up when it takes itself off the market for fifteen months.

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Adobe's antitrust case rested on a single proposition, argued consistently from September 2022 to December 2023: Figma built tools for designing websites and apps, Adobe sold tools for editing images and illustrations, and the one product where the two genuinely overlapped, XD, was too small to matter.

Complementary Products, Adjacent Buyers

The complementarity argument was not frivolous. Photoshop and Illustrator are desktop applications for creating raster and vector assets; Figma Design is a browser application for laying out and prototyping interfaces. Field himself described the combination as a chance to reimagine end-to-end product design in the browser using Adobe's work in 3D, video, vector, imaging and fonts. On XD, Adobe argued it had already effectively exited product design and had neither the ability nor the incentive to re-enter organically.

What Both Sides Had Written Down

The internal document evidence did not support the position. The CMA found that before the merger was announced, Figma treated Adobe XD as one of its closest competitors and remained consistently aware of the threat it posed even after Adobe cut XD's resourcing, and that third parties generally regarded XD as an adequate alternative and often as Figma Design's closest competitor. Running the other way, Adobe's own documents showed management analyzing the threat Figma posed to Illustrator and Photoshop among professional users as late as August 2022, a few weeks before signing, and building web versions of both applications in direct response.

That evidence produced two distinct theories. The first was straightforwardly horizontal: the merger would remove a close competitor and an important constraint in a market Figma already dominated. The second, and the more contested, was that it would eliminate Figma as a future entrant into vector and raster editing, where Illustrator held over 70% and Photoshop over 80% and the next-largest competitor held under 10% and 5% respectively. The CMA found Figma had made outline plans to build that functionality organically, had considered several acquisitions, and had reached an advanced stage on one raster editing opportunity.

Reverse killer acquisition

A killer acquisition is the purchase of a rival in order to shut down a product that would have competed with the buyer's own. A reverse killer acquisition inverts it: the buyer cancels its own competing project because it is acquiring the target instead, so the competition that disappears is the acquirer's. The European Commission used the term explicitly in its statement of objections, pointing to the discontinuation of Adobe XD and any successor product. It is a comparatively new theory of harm, and Adobe/Figma is the clearest large-cap application of it to date.

Brussels put both strands into one sentence when the deal died. Announcing the abandonment on December 18, 2023, Vestager said the transaction, by combining the two companies, would have removed the rivalry that existed and the rivalry that was coming.

Regulating a Future That Had Not Happened

The vector and raster theory of harm is where reasonable people still disagree, and it should be stated as unresolved rather than settled. It required regulators to conclude that Figma, absent the merger, would probably have grown into an effective competitor to two products with four decades of entrenchment, on the strength of board documents, an engineering team and an unconsummated acquisition process. Vestager defended the approach as protecting future rather than merely current competition, in her words a necessary response when large, established companies acquire successful disruptive innovators.

The counter-argument, made by antitrust practitioners at the time, is that potential competition is inherently unfalsifiable. A finding that a firm would have entered a market cannot be tested against anything, because the entry that was predicted may never happen either. Where a horizontal case can be argued from shares and diversion ratios, a potential-competition case is a forecast dressed as a finding.

What is striking about the regulatory story is how little of it was formal. Across three jurisdictions and fifteen months, not a single authority issued a final decision. The deal died on the published preliminary views of two of them and the credible threat of litigation from the third.

Washington: A Second Request and a Suit That Never Came

The United States moved first and finished last. Adobe and Figma filed under the Hart-Scott-Rodino Act on October 13, 2022, and on November 14, 2022 each received a second request from the Department of Justice, which suspended the waiting period until both certified substantial compliance. On February 23, 2023, Bloomberg reported that the DOJ was preparing an antitrust suit to block the deal, potentially within weeks; Adobe's shares slipped on the report.

No complaint was ever filed. That absence matters when weighing the case. The DOJ's theory was never tested in a courtroom, never subjected to cross-examination, and never reduced to a document anyone can now read. What the reporting did accomplish was to establish, ten months before the deal died, that Adobe faced litigation risk in its home jurisdiction on top of everything happening in Europe. Our primer on antitrust and regulatory approval in M&A covers how second requests and parallel reviews reshape a deal timetable.

London: Eight Weeks to Phase 1, Twenty-Four to a Provisional Finding

The United Kingdom operates a voluntary merger notification regime, which means the CMA chooses when to open a file rather than waiting for a mandatory filing. It did not formally launch its inquiry until May 3, 2023, nearly eight months after announcement. Once started, it moved quickly: a phase 1 decision on June 30, 2023 that the merger might be expected to result in a substantial lessening of competition, and a reference to a phase 2 investigation on July 13 before an independent inquiry group chaired by Margot Daly.

The provisional findings published on November 28, 2023 identified an SLC in three global markets, all-in-one product design software for professional users, vector editing software and raster editing software, and found no SLC in video editing or motion design. The CMA framed the UK stakes in national terms, citing a digital design sector worth close to £60 billion, about 2.7% of the economy, employing more than 850,000 people.

The remedies notice issued the same day was the practical death sentence. Because substantially all of Figma's business sat inside the very market where the SLC was found, the only options on the table were outright prohibition or a divestiture so extensive that it would have been functionally equivalent to one. There was no behavioral commitment Adobe could offer that would preserve the transaction.

Brussels: Sixteen Countries and an Article 22 Referral

The European Commission should not have had jurisdiction at all. Figma's European turnover was far below the thresholds in the EU Merger Regulation, and on a mechanical reading Brussels had no case to review. It acquired one because sixteen countries referred the transaction to the Commission under an Article 22 referral, and the deal was formally notified on June 30, 2023.

Article 22 referral

Article 22 of the EU Merger Regulation lets national competition authorities ask the European Commission to review a concentration that does not meet the EU's turnover thresholds but threatens to affect trade between member states. Historically used sparingly, it was revived by the Commission in 2021 as a way to catch acquisitions of high-growth companies whose revenue has not yet caught up with their competitive significance. Adobe/Figma, case M.11033, is a textbook example: a target too small to trigger the thresholds and, in the Commission's view, too important to ignore.

The Commission opened its phase II investigation on August 7, 2023 with a February 5, 2024 decision deadline, and sent Adobe a statement of objections on November 17, 2023 setting out its preliminary conclusion that the deal would significantly reduce competition in interactive product design software, vector editing tools and raster editing tools.

The table makes the structural point. Three authorities, three overlapping but non-identical theories, and not one binding decision on December 18, 2023. Adobe was not prohibited from buying Figma. It was told by two regulators, in documents that were explicitly provisional, what they currently thought, and it concluded that the remaining path was not worth walking.

The ending was fast and, by the standards of collapsed mega-deals, unusually clean. There was no litigation, no public recrimination and no dispute about whether the fee was owed.

A Mutual Termination Rather Than a Contractual One

The two companies signed a mutual termination agreement dated December 17, 2023, and issued a joint release before trading opened the following morning, citing a shared assessment that there was no clear path to the approvals required from the European Commission and the CMA. Adobe paid the $1 billion fee and the agreement resolved all outstanding matters between the parties.

The mechanism is worth noticing. The merger agreement's fee triggers required either the outside date to pass or a final non-appealable antitrust restraint to be in effect. Neither had happened: the September 15, 2023 outside date had been extended, and no regulator had prohibited anything. Adobe paid $1 billion under a separately negotiated termination agreement rather than under the merger agreement's own fee triggers, which is what a buyer does when it wants the matter closed rather than argued.

Field's framing was more resigned than defiant. He said the process had reinforced his belief in the merits of the deal but that it had become clear regulators did not see things the same way, a formulation that concedes nothing on the substance and everything on the outcome.

Why Neither Side Litigated

Adobe had appeal routes and did not use them. A final CMA prohibition could have been challenged before the Competition Appeal Tribunal; a Commission decision could have gone to the General Court in Luxembourg. Both are real remedies and both have overturned merger decisions.

The arithmetic defeated them. The CMA's statutory deadline was February 25, 2024 and the Commission's was February 5, 2024, so an appeal could not even begin until roughly fourteen months after signing, and judicial review of a merger decision in either forum routinely runs for years. Figma's business, its hiring and its product roadmap would have been frozen throughout. This is the same mechanism that killed Nvidia's attempt to buy Arm, where four unresolved investigations and no prohibition were enough, and the mirror image of Microsoft's fight for Activision Blizzard, where a buyer with a workable structural remedy chose to litigate and restructure rather than walk. Adobe had no equivalent remedy available, because there was nothing to divest that was not Figma.

What Each Side Carried Away

Figma received $1 billion in cash, unrestricted, into a company that private markets would mark at $12.5 billion five months later. That is close to 8% of its own value delivered as a fee, without a single share being issued. Set against it were fifteen months in which hiring, product decisions and equity plans were subordinated to a transaction that never happened.

Adobe absorbed a $1 billion expense, fifteen months of senior management attention, and something less easily quantified: a public record, assembled by the CMA out of its own documents, showing that it had canceled its own competing product six days before signing.

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Few private companies get marked five separate times in five years by five different mechanisms. Figma did, and the ladder is the most useful single exhibit in the case because it shows how much of a valuation is the asset and how much is the market it happens to be sold into.

Twelve and a Half Billion for the People Who Had Been Promised Twenty

In May 2024, five months after the deal died, Figma ran an employee tender offer at a $12.5 billion valuation, sized at roughly $600 million to $900 million and supported by more than twenty-five new and existing investors including Andreessen Horowitz, Sequoia, Kleiner Perkins, Fidelity and Franklin Venture Partners.

Secondary tender offer

A secondary tender offer lets existing shareholders, typically current and former employees, sell shares to incoming investors at a company-set price without the company issuing new stock or raising capital for itself. Late-stage private companies use them as a substitute liquidity event when an IPO or a sale is not available. Here the tender did a specific job: it gave Figma employees a way to realize value after the Adobe transaction had promised, and then removed, exactly that.

The number told the truth about the intervening two years. It was 25% above the June 2021 round and 37.5% below the price Adobe had agreed to pay, on a business whose revenue had grown substantially over the same period. Almost all of the difference was multiple compression rather than performance.

Thirty-Three Dollars, Then One Hundred Fifteen Fifty

Figma priced its initial public offering on July 30, 2025 at $33.00 per share, above its raised range, selling 36,937,080 shares of Class A common stock, of which 12,472,657 were primary and 24,464,423 were secondary shares sold by existing holders, for gross proceeds of roughly $1.2 billion and a valuation of about $19.3 billion at the offer price. Underwriters held an option over a further 5,540,561 shares. Morgan Stanley, Goldman Sachs, Allen & Company and J.P. Morgan were lead book-runners, Allen & Company having been Adobe's financial adviser on the failed acquisition three years earlier.

The first day was among the most violent debuts in recent memory. The stock opened at $85, was halted after passing $112, and closed at $115.50, up roughly 250% and briefly valuing Figma at close to $68 billion, more than three times what Adobe had offered. The underlying business justified enthusiasm if not that arithmetic: revenue of $749 million in 2024, up 48% from $504 million in 2023. The mechanics of how a book like this gets built, and why a pop of that size is a pricing failure rather than a triumph, are covered in our walkthrough of the IPO process.

The Round Trip Nobody Puts in the Pitch

By the close on August 31, 2026, Figma traded at $27.49 for a market capitalization of about $14.65 billion, against a 52-week range of $16.60 to $71.48. That is a decline of roughly three quarters from the first-day close, and it leaves the company worth less in the public market than the $20 billion Adobe agreed to pay almost four years earlier.

The operating business did not cause it. Revenue reached $1.056 billion in 2025, up 41%, with $1.7 billion of cash and marketable securities, and growth then accelerated for three consecutive quarters to $370.1 million in the second quarter of 2026, up 48%, with full-year guidance raised to roughly $1.465 billion.

What repriced was the revenue multiple, from roughly fifty times at the Adobe price to about fourteen times today, and the reason is the same force that is now reshaping Adobe. Investors have concluded that AI-native tools may compress the value of design software, and Figma's own numbers show the cost of defending against that: second-quarter cost of revenue rose 117% on AI infrastructure and inference, producing a GAAP operating loss of $117.3 million against operating income of $2.1 million a year earlier. The same de-rating has hit software valuations broadly, as our note on the SaaS valuation reset sets out.

The counterfactual is unusually observable here, because Adobe carried on executing the strategy the acquisition was supposed to accelerate, and the market has since told us what it thinks of the result.

Record Revenue, Falling Stock

Adobe launched Adobe Firefly, its generative imaging model, in March 2023 while the Figma review was still running, and it has embedded the technology across Photoshop, Illustrator, Premiere Pro and Express. Fiscal 2025 produced record revenue of $23.77 billion, up 11%, with ending ARR of $25.2 billion and AI-influenced ARR above $5 billion.

None of it held the stock. Adobe's shares peaked after the termination at $634.76 on February 2, 2024, less than two months later, and closed August 31, 2026 at $292.79 for a market capitalization of roughly $116 billion. That is below where the shares sat immediately after the 17% announcement-day fall in September 2022. On March 12, 2026, Narayen announced he would step down as chief executive after eighteen years, and on September 3, 2026 Adobe named Anil Chakravarthy, president of its Customer Experience Orchestration business, as president and chief executive effective December 1, 2026, with Narayen becoming executive chair.

The Dilution That Never Happened

From an Adobe shareholder's point of view the financial case for the block is stronger than the strategic one. The dilution from issuing new equity would have been permanent, and the $2.3 billion of retention compensation would have run through the income statement over four years; the $1 billion fee was a single quarter's charge.

The strategic case runs the other way and is not resolvable from the outside. Adobe's problem in 2026 is that professional creative work is migrating to browser-native, collaborative, AI-assisted tools, and Figma is the clearest expression of that migration. Buying it in 2022 would have been expensive and, on the evidence of Adobe's own canceled Project Spice, was the alternative to building it. Adobe has now done neither.

Nearly three years on, parts of this case are settled by the record and parts are not, and the honest answer separates them rather than collapsing them into a verdict.

What the Record Settles

Adobe's public position that Figma was not a competitor is not supportable on the documents. Figma named XD among its closest competitors, Adobe analyzed the threat Figma posed to Illustrator and Photoshop into August 2022, and Adobe canceled its own next-generation product design program six days before signing. Whatever the merits of the wider case, the horizontal overlap in product design software was real and both parties knew it.

The price is also settled, in a different sense. There was no auction, one alternative buyer withdrew immediately, and Adobe refused three times to move off $20 billion. That is not a contested premium; it is a single bidder's reservation price for a company it had failed to beat in the market, accepted by a board that expected the process to end if it pushed. And the fee was paid in cash on a mutual termination neither party disputed, which settles the narrow question of whether Figma's shareholders were compensated for the fifteen months.

What It Does Not Settle

The potential competition theory remains untested. Neither the CMA nor the Commission ever issued a final decision, no tribunal reviewed either analysis, and the DOJ never filed. The specific prediction, that an independent Figma would grow into a serious rival to Illustrator and Photoshop, has not been borne out in the years since: Figma has extended into whiteboarding, slides, marketing assets and AI-assisted app generation, and shipped a vector illustration toolset called Figma Draw in May 2025, but nothing that displaces Illustrator or Photoshop. That is evidence against the theory and not proof, because a Figma with Adobe's balance sheet behind it is not the company we can observe.

The dynamic competition framing has also been overtaken. The competitive threat to Adobe's franchise in 2026 is not Figma; it is generative AI, which is simultaneously the threat to Figma's own multiple. Regulators who spent 2023 protecting rivalry between two design software companies were, on the evidence of both share prices since, worrying about the wrong axis of competition.

Who Actually Won

Figma's selling shareholders and employees are the clearest winners, and the mechanism matters: they won by taking liquidity at every rung of the ladder. The $1 billion fee, the $12.5 billion tender, and 24.5 million secondary shares sold at $33 in the IPO all converted paper into cash before the multiple compressed. Anyone who simply held is worse off than the Adobe deal would have left them.

Figma the company is genuinely independent, growing 48%, and worth less than the offer it turned down through no fault of its operating performance. Field retains roughly 74% of the voting power and remains a billionaire; he also runs a company whose shares have fallen about three quarters from their first close. Adobe, for its part, avoided a purchase that on today's marks would have been close to value-neutral in price and highly uncertain in strategy. The regulators preserved a standalone competitor whose independence is now being tested by a force they were not looking at.

What the case does establish, and what makes it worth studying next to deals that closed, is that regulatory deliverability is a term of the deal rather than a condition to it. Adobe negotiated a defensible price, structured the consideration sensibly, pre-agreed a market-standard fee, and lost anyway, because there was no divestiture that was not the target itself and no behavioral commitment that could restore a competitor it had already canceled. The lesson is not that $20 billion was too much. It is that where the buyer's own documents describe the target as the reason its competing product died, no price is deliverable.

1. 1Adobe, "Adobe to Acquire Figma" (September 15, 2022).
2. 2Adobe Inc., Form 424B3 consent solicitation statement/prospectus, SEC EDGAR (January 2023), including the merger agreement and Background of the Transaction.
3. 3CNBC, "Adobe shares plunge on deal to acquire design platform Figma for $20 billion" (September 15, 2022).
4. 4Forbes, "What Adobe's Really Paying For Figma: $20 Billion, And Another Billion For CEO Dylan Field To Stick Around" (September 20, 2022).
5. 5Bloomberg, "US DOJ Preps Antitrust Suit to Block Adobe's $20 Billion Figma Deal" (February 23, 2023).
6. 6UK Competition and Markets Authority, Adobe / Figma merger inquiry case page.
7. 7UK Competition and Markets Authority, "Anticipated acquisition by Adobe Inc. of Figma, Inc.: Summary of provisional findings" (November 28, 2023).
8. 8UK Competition and Markets Authority, "Adobe / Figma deal could harm UK digital design sector" (November 28, 2023).
9. 9European Commission, "Commission sends Adobe Statement of Objections over proposed acquisition of Figma", IP/23/5778 (November 17, 2023).
10. 10European Commission, "Statement by Executive Vice-President Vestager on announcement by Adobe to abandon the acquisition of Figma", STATEMENT/23/6715 (December 18, 2023).
11. 11Adobe, "Adobe and Figma Mutually Agree to Terminate Merger Agreement" (December 18, 2023).
12. 12CNBC, "Adobe and Figma call off $20 billion acquisition after regulatory scrutiny" (December 18, 2023).
13. 13CNBC, "Figma tender offer values company at $12.5 billion" (May 16, 2024).
14. 14Figma, Inc., Form S-1 registration statement, SEC EDGAR (July 2025).
15. 15Figma, "Figma Announces Pricing of Initial Public Offering" (July 30, 2025).
16. 16CNBC, "Figma more than triples in NYSE debut after selling shares at $33" (July 31, 2025).
17. 17Figma, "Figma Announces Fourth Quarter and Fiscal Year 2025 Financial Results", SEC EDGAR (February 18, 2026).
18. 18Figma, "Figma Announces First Quarter 2026 Financial Results" (May 2026).
19. 19Figma, "Figma Announces Second Quarter 2026 Financial Results" (August 5, 2026).
20. 20Adobe, "Adobe Reports Record Q4 and FY2025 Revenue", SEC EDGAR (December 10, 2025), and the Q4 FY2025 earnings call transcript.
21. 21Adobe, "Leadership Update" (March 12, 2026).
22. 22Gibson Dunn, "Termination of Adobe / Figma Merger" (December 2023).
23. 23SiliconANGLE, "Adobe's weak forecast stokes fears of AI disruption, sending its stock lower" (December 11, 2024).