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> Fifteen months into the regulatory review process, Figma and Adobe no longer see a path toward regulatory approval How in the world did it take fifteen month

> Fifteen months into the regulatory review process, Figma and Adobe no longer see a path toward regulatory approval How in the world did it take fifteen months for regulators to reject this? That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. I don’t have an opinion on whether or not the merger should be approved, but regulators need to make up their minds quicker or else you can expect a serious chilling effect on M&A. Can you imagine agreeing to get acquired knowing that it can take up to 2 years to close? Anyone operating a real business would be crazy to sign on for the distraction.

pas 3y ago
we have no idea when they filed what papers where ... and when regulators answered and what, and then how the companies reacted, and when, and ... on the announcement, Sep 15, Adobe stock fell by 17%. the FTC opened some investigation on Nov 2. some EU thing started its process in February (based on filings by refering countries, and of course we have no idea of the details of those country-level processes) so, all in all, it's likely that relevant authorities quite soon signaled that Adobe-Figma is facing an uphill battle, and now, as they announced, they backed down. we have no idea of the negotiations, who was fast or not, who recommended what, asked for what guarantees, and so on.
- kmlx 3y ago
  > we have no idea when they filed what papers where ... and when regulators answered and what, and then how the companies reacted, and when, and ... detailed timeline, explanations, submissions etc here from UK’s CMA: https://www.gov.uk/cma-cases/adobe-slash-figma-merger-inquiry https://www.gov.uk/cma-cases/adobe-slash-figma-merger-inquir...
  - pas 3y ago
    thanks! very interesting. how do these big M&As work? was Adobe-Figma supposed to file some request? (but that would be on the timeline I suppose.)
lazide 3y ago
Seems like regulators didn’t reject it, but tarpitted it? And with market conditions having changed so much in 15 months, this could just as easily be buyer/sellers remorse before the deal actually closes. For a 15+ month closing, it wouldn’t be the first time! Actually completing mergers/buyouts takes years anyway.
woobar 3y ago
It is not a simple yes/no response from the regulators. First, they will request additional information. That will take some time to prepare. Then they would offer some changes to the proposal. I.e. we cannot approve this deal until some additional requirements are met. Then parties involved evaluate these requirements and counter. At some point business will decide that there are too many constraints and abandon the deal.
lancesells 3y ago
I'm going to guess regulators are plenty busy with a long list of things to do. When the acquisition gets announced it gets added to the list and they make their way to it. I really doubt regulators are dragging their feet. They are most likely understaffed and overworked. Things this big should take time for all sides.
remus 3y ago
> How in the world did it take fifteen months for regulators to reject this? Presumably regulators in a few countries were interested, each with their own processes, and presumably there's some fairly significant back and forth between the regulators and adobe/figma as adobe/figma tried to convince the regulators that the deal should go ahead. 15 months seems very believable for a deal of this size.
Bjorkbat 3y ago
I would argue that the regulators made their point pretty clear early on when the DOJ opened a lawsuit against Adobe. The people most responsible for keeping this in limbo were Adobe’s lawyers.
- ajmurmann 3y ago
  The Broadcom & VMware merger took similarly long and was approved. The duration is completely unacceptable and poison to business. I'm general against mergers and think it's better for consumers and the market if competitors fight to the (metaphorical) death instead, but if we do something, let's do it smoothly and right. That said, for mergers like that a ton of countries are involved which makes things even more complicated and makes it harder to point out where we need to make things smoother.
  - ethbr1 3y ago
    This would have gone quickly, to no, if Figma and Adobe had taken the first answer they got from DoJ at face value.
    - xvector 3y ago
      [flagged]
      - Matticus_Rex 3y ago
        You're getting downvotes, but IMO it's because people don't realize how far outside the norm Lina Khan's stances and approach has been.
        ethbr1 3y ago
        "The norm" is doing a lot of lifting there. Trailing historical average doesn't opine on correctness/utility.
        Ensorceled 3y ago
callalex 3y ago
Keep in mind that you are reading a corporate press release/propaganda piece, not journalism. It is going to be inherently one sided and will not tell the whole truth. Never take these kinds of statements at face value.
- Matticus_Rex 3y ago
  No one disputes that regulators basically killed this merger.
  - deleted 3y ago
    [deleted]
hn_throwaway_99 3y ago
> That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. Your understanding here is fundamentally wrong. Regulators in the US said very early on they were against this merger and were going to fight it. So most of what goes on in the meantime is Adobe and Figma (a) seeing if they can give something up to appease regulators (e.g. it's common for regulators to only sign off on a deal if one of the companies sells off some assets) or (b) decide if they're going to fight the regulators in court. Your idea of the regulators just "dragging their feet" is incorrect
- camhart 3y ago
  It seems wrong/illegal that they can just "decide they're against the merger" and sink it by dragging their feet. Its either legal or not. I haven't dug into the details, but based on this one line alone it sounds like this is abuse of power.
  - true_religion 3y ago
    It seems they are saying the merger as is will be illegal, however they give both companies some time to do something that will make the deal work. 15 months is a short time if you have to sell enterprise assets or let competition emerge to show the merger isn’t a danger to the market. If companies want a fast answer they can ask for one and it will be no. All said I do not worry about if billion dollar companies are being fairly treated. They have the capital and expertise to protect their own interests and it’s not worth it to preemptively fight on their behalf.
  - SomeCallMeTim 3y ago
    Another way to say "decide they're against the merger" is "evaluate the situation and make a timely ruling that they oppose the merger as illegal." Which is exactly what they were supposed to do. Adobe and Figma tried to argue with the regulators or find a compromise, but couldn't come up with a solution that satisfied all parties. If you try to extract subtle implications from the phrasing of a commenter on HN, you're likely to jump to the wrong conclusion.
BobaFloutist 3y ago
you can expect a serious chilling effect on M&A. Promise?
- xvector 3y ago
  Not a good thing when it's taken to absurd lengths. See Lina Khan's attempt to block the Within Unlimited acquisition. The problem with the current administration is that there's no good-faith path forwards to get anything done. If you have worked with the FTC recently you'd understand what a hostile clusterfuck it is.
  - briffle 3y ago
    you should really link to something about it that your specifying. Cause it really looks simiar to blocking Microsoft from buying Activision.. A company that makes the hardware trying to buy up all the independant software vendors and have them only make software for their hardware is getting really, really old. I think the only people that would complain are the ones who would directly benefit.
    - avarun 3y ago
      Microsoft plus Activision combined is about 6% of the gaming industry. “buy up all the independent[sic] software vendors” is some serious hyperbole.
  - BobaFloutist 3y ago
    I want it to be taken to absurd lengths. If and/or when the negative ramifications of discouraging mergers/acquisitions even begin to approach the damage that encouraging them has done to our economy and society, and only then, we can consider slowly reducing the pressure against.
    - xvector 3y ago
      M&A has done far more good for society than damage to it. A lot of human achievements are only achievable with scale. It makes zero sense to discourage a non-monopolistic M&A.
JAlexoid 3y ago
When it comes to whole market altering merger - they don't take that long. The negotiations took that long, to come to nothing. Clearly Adobe couldn't come up with a solution to the problem of a potential monopoly. Most M&As happen quite quick, mostly dealing with acquiring companies that are outside of the purview of regulators.
jorblumesea 3y ago
Regulators were always opposed to this merger, it's Adobe that wanted to fight it out. > you can expect a serious chilling effect on M&A Oh no, less corporate consolidation. The horror. Won't someone think of the capital class for once?
jasonlotito 3y ago
> How in the world did it take fifteen months for regulators to reject this? They didn't. They started seriously investigating it less than a month after the announcement and publicly shared this information just over a month later. > but regulators need to make up their minds quicker They did. Adobe and Figma were trying to appease regulators by figuring out if there was a way to handle their concerns. They aren't willing to divest themselves enough from their existing portfolio or offer concessions. If you want them to make up their minds quicker, then the default answer should be No. With weeks not even being an acceptable time frame for action, anything other than No is harmful. https://www.politico.com/news/2022/11/02/doj-review-adobe-20-billion-figma-deal-00064671 https://www.politico.com/news/2022/11/02/doj-review-adobe-20...
jzb 3y ago
"I have to assume" -- you do? Why? The DOJ already signaled it wanted to block this on antitrust grounds almost a year ago. If "regulators" had immediately rejected the deal, there'd be a similar "oh, this will have a chilling effect" complaint because they slapped it down without adequate due diligence. This is one M&A deal out of many. The vast majority -- even some that shouldn't be approved IMO -- sail through or squeak through due to persistence. I just can't find it within myself to feel bad for Adobe in this, since the most likely outcome was to just solidify Adobe's grip on the market and reduce competition. I know quite a few people who use Figma who were absolutely dreading this merger.
mrandish 3y ago
> How in the world did it take fifteen months for regulators to reject this? I agree with your overall point that the current regulatory process related to anti-trust M&A very much needs to be improved. While the delay may be the proximate cause, focusing on that risks failing to address the fundamental root cause of the problem, which is A) lack of clarity in regulatory policies and the underlying laws authorizing them, and B) their inconsistent application across different industry contexts and between different international jurisdictions. The lack of clarity can be improved by regulators adopting clearer public guidelines about how they will interpret and apply the rules (and then establish credibility by actually sticking with those guidelines over time). Improving consistency across jurisdictions is more challenging but still possible if regulators in the largest domains (US and EU) collaborate to harmonize their policies (as is done in many other regulatory contexts). Recently, Lina Khan in the US has made this problem far worse by aggressively pursuing quite extreme interpretations of anti-trust law, and worse, doing so without establishing any corresponding framework or justification. As a result, this bungling has caused her agency to lose several high-profile cases. So far, much of this bungling seems to be "just for show" (ie political posturing) since it's not working. Unfortunately, it also has the effect of nerfing the market for entrepreneurial exits via acquisition. While it's true that acquisitions large enough to attract anti-trust scrutiny are outliers, much of the money invested in earlier stage startups (which drives most new job creation in the US), is justified by average returns substantially propped up by a few such >100x acquisitions. Half the extreme high-end outliers being lopped off by regulatory uncertainty around large acquisitions is one reason capital for new business creation and growth is getting scarcer and more expensive. The point being, this matters to our industry and jobs.
- wins32767 3y ago
  > earlier stage startups (which drives most new job creation in the US) This is absolutely not true.
  - mrandish 3y ago
    I was referring not to just valley tech startups but investing in new small businesses overall. Per the U.S. Gov Small Business Administration: > "Despite the jobs lost during the recession, large businesses generated 6.7 million net new jobs over the past 25 years. During the same period, small businesses generated 12.9 million net new jobs, meaning small businesses have accounted for 66 percent of employment growth over the last 25 years." https://advocacy.sba.gov/wp-content/uploads/2022/04/Small-Business-Job-Creation-Fact-Sheet-Apr2022.pdf https://advocacy.sba.gov/wp-content/uploads/2022/04/Small-Bu...
tick_tock_tick 3y ago
The current administration has made it very clear they will block nearly all attempts at mergers and if they can't block it will drag the process out as long as possible to make it as unappealing as possible.
deleted 3y ago
[deleted]
captnFwiffo 3y ago
[dead]

pas 3y ago

we have no idea when they filed what papers where ... and when regulators answered and what, and then how the companies reacted, and when, and ... on the announcement, Sep 15, Adobe stock fell by 17%. the FTC opened some investigation on Nov 2. some EU thing started its process in February (based on filings by refering countries, and of course we have no idea of the details of those country-level processes) so, all in all, it's likely that relevant authorities quite soon signaled that Adobe-Figma is facing an uphill battle, and now, as they announced, they backed down. we have no idea of the negotiations, who was fast or not, who recommended what, asked for what guarantees, and so on.

kmlx 3y ago
> we have no idea when they filed what papers where ... and when regulators answered and what, and then how the companies reacted, and when, and ... detailed timeline, explanations, submissions etc here from UK’s CMA: https://www.gov.uk/cma-cases/adobe-slash-figma-merger-inquiry https://www.gov.uk/cma-cases/adobe-slash-figma-merger-inquir...
- pas 3y ago
  thanks! very interesting. how do these big M&As work? was Adobe-Figma supposed to file some request? (but that would be on the timeline I suppose.)

lazide 3y ago

Seems like regulators didn’t reject it, but tarpitted it? And with market conditions having changed so much in 15 months, this could just as easily be buyer/sellers remorse before the deal actually closes. For a 15+ month closing, it wouldn’t be the first time! Actually completing mergers/buyouts takes years anyway.

woobar 3y ago

It is not a simple yes/no response from the regulators. First, they will request additional information. That will take some time to prepare. Then they would offer some changes to the proposal. I.e. we cannot approve this deal until some additional requirements are met. Then parties involved evaluate these requirements and counter. At some point business will decide that there are too many constraints and abandon the deal.

lancesells 3y ago

I'm going to guess regulators are plenty busy with a long list of things to do. When the acquisition gets announced it gets added to the list and they make their way to it. I really doubt regulators are dragging their feet. They are most likely understaffed and overworked. Things this big should take time for all sides.

remus 3y ago

> How in the world did it take fifteen months for regulators to reject this? Presumably regulators in a few countries were interested, each with their own processes, and presumably there's some fairly significant back and forth between the regulators and adobe/figma as adobe/figma tried to convince the regulators that the deal should go ahead. 15 months seems very believable for a deal of this size.

Bjorkbat 3y ago

I would argue that the regulators made their point pretty clear early on when the DOJ opened a lawsuit against Adobe. The people most responsible for keeping this in limbo were Adobe’s lawyers.

ajmurmann 3y ago
The Broadcom & VMware merger took similarly long and was approved. The duration is completely unacceptable and poison to business. I'm general against mergers and think it's better for consumers and the market if competitors fight to the (metaphorical) death instead, but if we do something, let's do it smoothly and right. That said, for mergers like that a ton of countries are involved which makes things even more complicated and makes it harder to point out where we need to make things smoother.
- ethbr1 3y ago
  This would have gone quickly, to no, if Figma and Adobe had taken the first answer they got from DoJ at face value.
  - xvector 3y ago
    [flagged]
    - Matticus_Rex 3y ago
      You're getting downvotes, but IMO it's because people don't realize how far outside the norm Lina Khan's stances and approach has been.
      - ethbr1 3y ago
        "The norm" is doing a lot of lifting there. Trailing historical average doesn't opine on correctness/utility.
      - Ensorceled 3y ago

callalex 3y ago

Keep in mind that you are reading a corporate press release/propaganda piece, not journalism. It is going to be inherently one sided and will not tell the whole truth. Never take these kinds of statements at face value.

Matticus_Rex 3y ago
No one disputes that regulators basically killed this merger.
- deleted 3y ago
  [deleted]

hn_throwaway_99 3y ago

> That’s an absurdly long time to be operating a business in limbo, and I have to assume it’s the regulators dragging their feet since the companies have every incentive to move quickly. Your understanding here is fundamentally wrong. Regulators in the US said very early on they were against this merger and were going to fight it. So most of what goes on in the meantime is Adobe and Figma (a) seeing if they can give something up to appease regulators (e.g. it's common for regulators to only sign off on a deal if one of the companies sells off some assets) or (b) decide if they're going to fight the regulators in court. Your idea of the regulators just "dragging their feet" is incorrect

camhart 3y ago
It seems wrong/illegal that they can just "decide they're against the merger" and sink it by dragging their feet. Its either legal or not. I haven't dug into the details, but based on this one line alone it sounds like this is abuse of power.
- true_religion 3y ago
  It seems they are saying the merger as is will be illegal, however they give both companies some time to do something that will make the deal work. 15 months is a short time if you have to sell enterprise assets or let competition emerge to show the merger isn’t a danger to the market. If companies want a fast answer they can ask for one and it will be no. All said I do not worry about if billion dollar companies are being fairly treated. They have the capital and expertise to protect their own interests and it’s not worth it to preemptively fight on their behalf.
- SomeCallMeTim 3y ago
  Another way to say "decide they're against the merger" is "evaluate the situation and make a timely ruling that they oppose the merger as illegal." Which is exactly what they were supposed to do. Adobe and Figma tried to argue with the regulators or find a compromise, but couldn't come up with a solution that satisfied all parties. If you try to extract subtle implications from the phrasing of a commenter on HN, you're likely to jump to the wrong conclusion.

BobaFloutist 3y ago

you can expect a serious chilling effect on M&A. Promise?

xvector 3y ago
Not a good thing when it's taken to absurd lengths. See Lina Khan's attempt to block the Within Unlimited acquisition. The problem with the current administration is that there's no good-faith path forwards to get anything done. If you have worked with the FTC recently you'd understand what a hostile clusterfuck it is.
- briffle 3y ago
  you should really link to something about it that your specifying. Cause it really looks simiar to blocking Microsoft from buying Activision.. A company that makes the hardware trying to buy up all the independant software vendors and have them only make software for their hardware is getting really, really old. I think the only people that would complain are the ones who would directly benefit.
  - avarun 3y ago
    Microsoft plus Activision combined is about 6% of the gaming industry. “buy up all the independent[sic] software vendors” is some serious hyperbole.
- BobaFloutist 3y ago
  I want it to be taken to absurd lengths. If and/or when the negative ramifications of discouraging mergers/acquisitions even begin to approach the damage that encouraging them has done to our economy and society, and only then, we can consider slowly reducing the pressure against.
  - xvector 3y ago
    M&A has done far more good for society than damage to it. A lot of human achievements are only achievable with scale. It makes zero sense to discourage a non-monopolistic M&A.

JAlexoid 3y ago

When it comes to whole market altering merger - they don't take that long. The negotiations took that long, to come to nothing. Clearly Adobe couldn't come up with a solution to the problem of a potential monopoly. Most M&As happen quite quick, mostly dealing with acquiring companies that are outside of the purview of regulators.

jorblumesea 3y ago

Regulators were always opposed to this merger, it's Adobe that wanted to fight it out. > you can expect a serious chilling effect on M&A Oh no, less corporate consolidation. The horror. Won't someone think of the capital class for once?

jasonlotito 3y ago

> How in the world did it take fifteen months for regulators to reject this? They didn't. They started seriously investigating it less than a month after the announcement and publicly shared this information just over a month later. > but regulators need to make up their minds quicker They did. Adobe and Figma were trying to appease regulators by figuring out if there was a way to handle their concerns. They aren't willing to divest themselves enough from their existing portfolio or offer concessions. If you want them to make up their minds quicker, then the default answer should be No. With weeks not even being an acceptable time frame for action, anything other than No is harmful. https://www.politico.com/news/2022/11/02/doj-review-adobe-20-billion-figma-deal-00064671 https://www.politico.com/news/2022/11/02/doj-review-adobe-20...

jzb 3y ago

"I have to assume" -- you do? Why? The DOJ already signaled it wanted to block this on antitrust grounds almost a year ago. If "regulators" had immediately rejected the deal, there'd be a similar "oh, this will have a chilling effect" complaint because they slapped it down without adequate due diligence. This is one M&A deal out of many. The vast majority -- even some that shouldn't be approved IMO -- sail through or squeak through due to persistence. I just can't find it within myself to feel bad for Adobe in this, since the most likely outcome was to just solidify Adobe's grip on the market and reduce competition. I know quite a few people who use Figma who were absolutely dreading this merger.

mrandish 3y ago

> How in the world did it take fifteen months for regulators to reject this? I agree with your overall point that the current regulatory process related to anti-trust M&A very much needs to be improved. While the delay may be the proximate cause, focusing on that risks failing to address the fundamental root cause of the problem, which is A) lack of clarity in regulatory policies and the underlying laws authorizing them, and B) their inconsistent application across different industry contexts and between different international jurisdictions. The lack of clarity can be improved by regulators adopting clearer public guidelines about how they will interpret and apply the rules (and then establish credibility by actually sticking with those guidelines over time). Improving consistency across jurisdictions is more challenging but still possible if regulators in the largest domains (US and EU) collaborate to harmonize their policies (as is done in many other regulatory contexts). Recently, Lina Khan in the US has made this problem far worse by aggressively pursuing quite extreme interpretations of anti-trust law, and worse, doing so without establishing any corresponding framework or justification. As a result, this bungling has caused her agency to lose several high-profile cases. So far, much of this bungling seems to be "just for show" (ie political posturing) since it's not working. Unfortunately, it also has the effect of nerfing the market for entrepreneurial exits via acquisition. While it's true that acquisitions large enough to attract anti-trust scrutiny are outliers, much of the money invested in earlier stage startups (which drives most new job creation in the US), is justified by average returns substantially propped up by a few such >100x acquisitions. Half the extreme high-end outliers being lopped off by regulatory uncertainty around large acquisitions is one reason capital for new business creation and growth is getting scarcer and more expensive. The point being, this matters to our industry and jobs.

wins32767 3y ago
> earlier stage startups (which drives most new job creation in the US) This is absolutely not true.
- mrandish 3y ago
  I was referring not to just valley tech startups but investing in new small businesses overall. Per the U.S. Gov Small Business Administration: > "Despite the jobs lost during the recession, large businesses generated 6.7 million net new jobs over the past 25 years. During the same period, small businesses generated 12.9 million net new jobs, meaning small businesses have accounted for 66 percent of employment growth over the last 25 years." https://advocacy.sba.gov/wp-content/uploads/2022/04/Small-Business-Job-Creation-Fact-Sheet-Apr2022.pdf https://advocacy.sba.gov/wp-content/uploads/2022/04/Small-Bu...

tick_tock_tick 3y ago

The current administration has made it very clear they will block nearly all attempts at mergers and if they can't block it will drag the process out as long as possible to make it as unappealing as possible.

deleted 3y ago

[deleted]

captnFwiffo 3y ago

[dead]