Adobe executives say the deal will create opportunities in mobile applications and hail the "complementary functionality" of Flash and PDF.In a move that is likely to have major ramifications for the publishing, print and Web design industries, Adobe Systems Inc. has announced it will buy archrival Macromedia Inc. in a deal worth around $3.4 billion.
The deal, which has been approved by both sets of directors, is an all-stock transaction under which Macromedia shareholders will receive 0.69 shares of Adobe common stock, which will mean that former Macromedia shareholders will hold around 18 percent of the combined companies after the deal. Calculated from prices at close of the markets last Friday, this makes the deal worth $41.86 per share of Macromedia common stock.
Adobe's Bruce Chizen will continue as CEO of the company, which will continue to be known as Adobe Systems Inc., with Shantanu Narayen remaining as president. Stephen Elop, president and chief executive of Macromedia, will join the Adobe board as president of worldwide field operations, while Rob Burgess, chairman of Macromedia, will also join the Adobe board.
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"Customers are calling for integrated software solutions that enable them to create, manage and deliver a wide range of compelling content and applications—from documents and images to audio and video," said Adobe's Chizen in a prepared statement. "By combining our powerful development, authoring and collaboration software—along with the complementary functionality of PDF and Flash—Adobe has the opportunity to bring this vision to life with an industry-defining technology platform."
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