Adobe and Figma announced on Monday that they are amicably canceling their merger agreement, which would have seen Adobe purchase the Figma product design platform for $20 billion, in response to increasing pressure from regulators in the UK and EU.

Shantanu Narayen, the CEO of Adobe, stated in a statement, “Adobe and Figma strongly disagree with the recent regulatory findings, but we believe it is in our respective best interests to move forward independently.” “Even though Figma and Adobe had a common goal of redefining creativity and productivity together, we are still in a strong position to take advantage of our enormous market opportunity and our mission to transform the world through individualized digital experiences.”

Adobe will have to pay Figma a $1 billion cash reverse termination fee as a result of the termination.

“By combining these two companies, the proposed acquisition would have terminated all current and prevented all future competition between them,” stated EU competition commissioner Margrethe Vestager. Our thorough analysis revealed that this would result in increased costs, lower quality, or fewer options for consumers.

Dylan Field, co-founder and CEO of Figma, stated, “Going through this process with Shantanu, David, and the Adobe team has only reinforced my belief in the merits of this deal, but it’s become increasingly clear over the past few months that regulators don’t see things the same way.” “Although we are disappointed with the result, I want to express my gratitude to everyone who helped with this endeavor, and I am eager to work with Adobe to find new ways to innovate for our respective communities.”

All lingering issues related to the deal have been resolved by the parties signing a termination agreement, which also includes Adobe paying Figma the termination fee that was previously agreed upon.

CWEB asked Mike Dion about the terminated merger agreement.

“The Adobe and Figma deal being canceled was a win for Adobe’s investors. To that point, the market has responded favorably, with Adobe trading up nearly 3% and recovering losses from the challenging earnings report on December 14th.”

While Figma’s collaborative platform would certainly be a great addition to Adobe, Adobe has the resources and knowledge to build collaboration themselves without spending $20 billion, in addition to the $9 million restricted stock unit for Figma leadership. I don’t believe this deal ever made sense for Adobe investors at that valuation. Keep in mind that the valuation in 2021 was $10 billion, and only one year later, Adobe offered $20 billion.”

Mike Dion is an FP&A, corporate finance, and small business expert who has had the opportunity to work for both Fortune 100 and smaller companies across entertainment, telecom, and construction. At F9Finance.com, he simplifies finance and accounting concepts to make them easily understandable and accessible to all readers.