In September 2022, Adobe announced it would acquire Figma for about $20 billion in cash and stock, a nearly fifty-times revenue multiple for a company still burning through cash. Design software is a low-revenue corner of the tech world, and the price stunned the industry. Regulators in the U.K. and the European Union found the combination so concerning that Adobe walked away in December 2023 rather than litigate.
Shantanu Narayen calls Dylan Field
September 2022
Shantanu Narayen: Dylan, I've never done this before, but I want to buy Figma. Your product is the future of design. Adobe and Figma together would define how the world designs software.
Dylan Field: Shan, Figma is my life's work. We've built something independent and beloved. I need to know the price makes it worth giving that up.
Shantanu Narayen: $20 billion, paid half in cash, half in stock. It's a premium that says how much we believe in you and your team.
Dylan Field: Twenty billion dollars. You understand the design tool market is only about four or five billion a year? You're paying a multiple of the entire category.
Shantanu Narayen: I'm not buying the category. I'm buying the network. The designers who live in Figma, the communities, the ecosystem that grows around it. That's the prize.
[Reconstruction from Adobe's September 2022 announcement and executives' public statements on the rationale behind the deal.]
The U.K. regulator opens an inquiry
2023
CMA case officer: Adobe, we intend to conduct a Phase 2 investigation. We have concerns that the merger would substantially reduce competition in the supply of screen design software and, separately, in certain digital design tools.
Adobe counsel: Figma is a startup with less than $300 million in revenue. Adobe's design tools are a fraction of our overall business. The overlap is minimal and there are strong, credible competitors like Canva.
CMA case officer: Our concern is not the small overlap today. It is that Figma is the emerging standard that could one day challenge Adobe across its creative suite. This is a case about protecting future competition—the incentives Adobe gains by owning the one credible challenger.
Adobe counsel: Figma didn't start as a challenger to Photoshop. It's a collaboration tool. The markets are distinct.
CMA case officer: We do not agree, and we will be sending you our provisional findings to that effect.
[The CMA provisionally found the deal could harm Adobe's software rivals and innovation in the design sector; the EU opened a parallel in-depth probe.]
Adobe decides to walk away
December 2023
Adobe counsel: Shan, the CMA has moved toward an adverse decision and the EU is headed the same way. We could litigate, but the regulatory clock runs well into next year and the fight would be bruising and uncertain across two jurisdictions.
Shantanu Narayen: What are our options?
Adobe counsel: We could offer remedies—sell off parts, license Figma on specific terms. The regulators would still be skeptical. Realistically, clearing this deal requires a commitment nobody would find credible.
Shantanu Narayen: Then we terminate. I will not sign a weak deal or drag the company through years of regulatory war for a transaction that regulators have decided is doomed.
[Adobe and Figma terminated the agreement in December 2023. Adobe paid a $1 billion termination fee and returned the $20 billion price to nothing.]
The collapse of the Figma deal was a turning point. It signaled that even cash-rich software acquirers could no longer assume regulators would wave through big deals, and it handed the emerging standard back to an independent Figma, which was later valued far above the abandoned purchase price.
[This document reconstructs the public record of the Adobe–Figma transaction, including the CMA's final report and Adobe's public statements. Dialogue is narrative reconstruction, not a verbatim transcript.]