Adobe Inc. (ADBE) shares dropped in the extended session Thursday following a report that the Department of Justice (DOJ) was preparing to block the company’s $20 billion acquisition of Figma. Adobe shares fell more than 5% after hours, adding to a 0.5% regular session decline to close at $347.02. The stock started sliding after hours following the report from Bloomberg News.
This is not the first time the DOJ has been involved in this acquisition. Back in November, Politico reported that the DOJ was also preparing to block the deal. The DOJ’s antitrust division has reportedly been looking into the acquisition, which was announced in October, to determine whether it would significantly reduce competition in the software industry.
The DOJ has yet to make a decision on the deal, but Bloomberg’s report suggests that the agency is leaning towards blocking it. If the DOJ does block the deal, it would be a huge blow to Adobe, which has been looking to expand its reach in the software industry. Adobe has already invested heavily in the acquisition and was looking to use Figma to help it compete with rivals like Microsoft and Salesforce.
Adobe has argued that the acquisition would not create a monopoly, as the two companies have different areas of focus and do not compete in the same markets. However, the DOJ has reportedly been concerned that the acquisition would lead to higher prices and fewer choices for customers.
The DOJ has not commented on the report, but if it does decide to block the deal, Adobe will likely have to find another way to expand its reach in the software industry. The company may have to look for smaller acquisitions or focus on developing new products and services.
Regardless of the DOJ’s decision, the acquisition has already created a lot of uncertainty in the market. Investors are closely watching the situation and many have already reacted to the news by selling their shares. The stock has been volatile in recent weeks as investors await the DOJ’s decision.
Adobe’s acquisition of Figma has been closely watched by the software industry, and the DOJ’s decision will have a major impact on the future of the industry. If the DOJ blocks the deal, it could have a ripple effect on other software companies and could even influence the way the industry operates in the future. It remains to be seen what the DOJ will decide, but investors will be closely watching the situation to see how it unfolds.
