Adobe on Monday announced that it had abandoned its proposed $20 billion takeover of web design tool maker Figma.

The deal, initially announced in September 2022, would’ve seen Adobe acquire one of the major challengers to its design tool dominance.

The takeover however hit roadblocks this year as regulators from the European Union and UK both said it would harm competition. The UK’s Competition and Markets Authority (CMA) last month formally advised against the deal, stating that it could harm competition in the UK’s digital design sector.

A little less than three weeks later, Adobe issued a statement notifying that the company and Figma had mutually agreed to terminate the merger.

Adobe will pay a termination fee of $1 billion.

In a statement, Adobe said that there is “no clear path” to receiving the necessary regulatory approvals.

Shantanu Narayen, chair and chief executive officer at Adobe, 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.”

These sentiments were echoed by Figma boss Dylan Field, who said that going through the process “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.”

He said: “While we’re disappointed in the outcome, I am deeply grateful to everyone who has contributed to this effort and excited to find other ways to innovate on behalf of our respective communities with Adobe.”

A report from Reuters noted that the two companies had been in constant communications with antitrust agencies in the UK, EU and United States, but that the CMA would have required Adobe to divest Figma design, which makes up a core part of the takeover.

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