A failed acquisition often spells doom for the target company. But despite its $20 billion takeover by Adobe not going through, there are reasons to think that Figma will be just fine. That the online design company will get a $1 billion termination fee from Adobe will help soften the blow. But it is not the windfall some think it is; spending more than a year in regulatory limbo always takes a toll on a company and its team.
Key Takeaway
Despite the failed acquisition by Adobe, Figma’s future looks promising with the
billion termination fee and the understanding that the risk was inherent in the deal.
Regulatory Limbo and Breakup Fees
While M&As can be long and taxing for both parties, breakup fees aren’t the norm. So, “no, startups, you’re not getting a breakup fee unless it’s a sizable enough deal where there is antitrust risk,” VC Ed Sim wrote on X. And in most cases, regulators are unlikely to get involved.
Signal for Startup M&A?
The Adobe-Figma breakup isn’t a signal of what’s to come for startup M&A. But in the Adobe-Figma deal, where both companies knew that this risk was front and center, even a $1 billion fee seems only fair compared to the uncertainty ahead.
