San Francisco, Dec 19 (IANS): Software major Adobe has announced to terminate its $20 billion mega deal to buy its rival Figma after the acquisition hit the regulatory roadblock in the EU and the UK.

The companies announced they have entered into a mutual agreement to terminate their previously announced merger agreement, originally announced on September 15, 2022, under which Adobe would have acquired Figma for a mix of cash and stock consideration.

Adobe and Figma mutually agreed to terminate the transaction based on a joint assessment that there is no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority, the companies said in a statement late on Monday.

“Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” said Shantanu Narayen, chair and CEO, Adobe.

“While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalise on our massive market opportunity and mission to change the world through personalised digital experiences,” he added.

First announced in September last year, the deal attracted regulatory scrutiny due to the size of the transaction.

The European Union in August this year opened an in-depth antitrust investigation into Adobe’s bid to acquire product design platform Figma for $20 billion, saying that the transaction may reduce competition in the global markets for the supply of interactive product design software and for digital asset creation tools.

The UK’s competition watchdog also found that the acquisition could reduce innovation and result in a “substantial lessening of competition”.

“Going through this process with Shantanu, David and the Adobe team has only reinforced my belief in the merits of this deal, but it’s become increasingly clear over the past few months that regulators don’t see things the same way,” said Dylan Field, co-founder and CEO, Figma.

“While we’re disappointed in the outcome, I am deeply grateful to everyone who has contributed to this effort and excited to find other ways to innovate on behalf of our respective communities with Adobe,” he added.

The companies have signed a termination agreement that resolves all outstanding matters from the transaction, including Adobe paying Figma the previously agreed upon $1 billion termination fee.