Adobe says it has abandoned its $20bn (£15.8bn) merger with design platform Figma amid opposition from European regulators.
Britain’s Competition and Markets Authority (CMA) had revealed earlier in the day that Adobe, best known for its Photoshop editing software, would not propose solutions to address its concerns over the acquisition.
The watchdog’s EU counterpart had similar concerns.
The deal, announced last September, was the latest to draw heavy scrutiny from regulators worried about big tech acquisitions that increase the market power of dominant companies.
For its part, the CMA had provisionally found that the deal could harm the market for product design software.
Adobe had argued that it does not compete with Figma in any meaningful way.
It said the only product relevant to the investigation was the Adobe XD design tool, a loss-making app that employed just five people.
Adobe CEO Shantanu Narayen said: “Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently.
A termination fee of DKK 1 billion. USD is payable to Figma by Adobe.
However, its share price regained some value.
The battle with Adobe marked another high-profile intervention by the CMA, which recently U-turned on its opposition to Microsoft’s acquisition of Activision Blizzard after the US tech company offered new solutions to offset its concerns.
The deal had been seen as a bet on the “future of work” but had sparked concern among investors, particularly over the price tag.
Adobe’s market cap was hit by $30bn when the planned tie-up was first announced.