The Competition and Markets Authority (CMA), the U.K.'s competition watchdog, has launched a detailed investigation into Adobe Inc's (NASDAQ: ADBE) $20 billion acquisition of Figma, a cloud-based design platform after Adobe declined to propose any solutions to allay the regulator's concerns.
The deal, one of the largest takeovers of a private software maker, has a targeted completion in 2023.
The CMA had previously voiced worries last month that the merger could reduce choices for digital apps, websites, and product designers. It also raised issues regarding the supply of screen design software, a sector where both entities are competitors.
The CMA granted Adobe five business days to suggest ways to alleviate these concerns, but on July 7, Adobe stated it wouldn't propose any solutions, according to the CMA's announcement.
This merger will be referred for a phase 2 investigation unless the parties offer acceptable undertakings to address these competition concerns.
Adobe and Figma referred Reuters to their June response when the regulator first raised these concerns. "We are eager to present these facts in the next stage of the process and successfully conclude the transaction," an Adobe spokesperson added.
The CMA's detailed investigation, or phase two probe, will be executed by a group of independent experts, with the conclusion expected by December 27.
The company continues to face heavy global antitrust resistance to its proposed acquisition of Figma. The European Commission now has a provisional deadline of August 7 to decide whether to clear the acquisition based on its first investigative phase or to move to a more detailed phase 2 investigation.
Price Action: ADBE shares are up 0.57% at $510.25 on the last check Thursday.