Adobe Systems Incorporated (Nasdaq: ADBE) has announced a definitive agreement to acquire Macromedia (Nasdaq: MACR) in an all-stock transaction valued at approximately $3.4 billion. Under the terms of the agreement, which has been approved by both boards of directors, Macromedia stockholders will receive, at a fixed exchange ratio, 0.69 shares of Adobe common stock for every share of Macromedia common stock in a tax-free exchange. Based on Adobe’s and Macromedia’s closing prices on Friday April 15, 2005, this represents a price of $41.86 per share of Macromedia common stock.
A statement in the press release for Adobe reads:
The combination of Adobe and Macromedia strengthens our mission of helping people and organizations communicate better. Through the combination of our powerful development, authoring and collaboration tools – and the complementary functionality of PDF and Flash – we have the opportunity to drive an industry-defining technology platform that delivers compelling, rich content and applications across a wide range of devices and operating systems.
By combining the passion and creativity of two leading-edge companies, we will continue driving innovations that are changing the ways people everywhere are experiencing and interacting with information.
John Kennedy reports for SiliconRepublic.com, “Bola Rotibi, a senior analyst with Ovum commented: ‘This acquisition is major news for the software industry, although not altogether surprising. Macromedia has regularly been seen as a prime candidate for acquisition. The deal itself is not without issues from a competition standpoint since the resulting business will almost certainly hold a sizeable chunk of the GUI market that would make it difficult for some smaller vendors to play in. The companies have overlapping product sets and a product portfolio that goes in many different directions. That is both a positive and a negative and will need to be addressed, going forward,’ Rotibi said.”
Kennedy reports, “Rotibi also warned that the transaction could result in anti-competition court cases arising from competitors’ inability to compete against what in effect will be a software juggernaut. ‘Adobe’s revenues are around $2bn and Macromedia’s are around $350m to $400m – the revenue potential of their combined market play and future potential is substantial. The compelling offering of a cross platform play that serves Microsoft’s own environment will make it a formidable competitor for the Redmond giant but we think it would have had trouble making its own bid for Macromedia on anti-trust grounds. Ultimately both Adobe and Macromedia both have superb cross platform technologies and if they can exploit the ubiquity of the PDF reader and Flash, and really emphasise the ‘any client anywhere’ theme they will be a in a formidable position to dictate industry directions for the future,’ Rotibi concluded.”
Full article here.
MacDailyNews Take: If approved, this deal would remove another strong competitor in the software space and leave an even smaller handful of major players. If fact, in the consumer software market, excluding games, only Adobe, Apple, and Microsoft immediately spring to mind as large companies that make a wide variety of software applications. Still, hurray at least for it’s tabbed palettes for everyone! So, what happens to Dreamweaver? Are we all going to be using GoLive soon?
MDN’s take would obviously be completely different (i.e. ecstatic) if it were Apple who had “remove[d] another strong competitor in the software space.”
Not Good. Especially from a designers point of view.
I can see FlashPaper 2 being of interest to Adobe but come on. Flash, Fireworks, Contribute, Dreamweaver, ColdFusion, (heck even Director and Freehand). I fear what will happen to these products. I’m sure it’s already been said, but Macromedia excels in web development. Adobe has no idea what they are doing in that arena.
Note to Adobe: don’t ruin Flash, Dreamweaver and ColdFusion. Don’t kill Macromedia’s versions of the duplicate programs.
I have bad feelings about this.
I agree with those that are concerned. This is very bad for Apple. At NAB this weekend Adobe was all over the place with Dell. This nmerger will mean fewer pro applications for the Macintosh and that’s very bad for Apple. Apple should have bought Macromedia years ago in 01-02 when it’s value was less.
This is a major blow to Apple.It’s an anti-competive move by Adobe, but the Justice Department is unlikely to care. They will approve the merger without any problems.But the reality is, anyone could have seen this coming. It was just a matter of time before Microsoft or Adobe gobbled up Macromedia.
http://www.ftc.gov/bc/hsr/hsr.htm
yea this isn’t exactly great news. I’m thinking what we’ll wind up with is a series of programs that combine the terrible Macromedia GUI with the pitiful reliability of the latest Adobe products. Crap + Crap = Crap
NNNNOOOOOOOOOOOOOOOOO.
What’s going to happen to ColdFusion and Jrun and all the other server products that make the internet tick? I like Adobe, but not that much – GoLive sucks. I’ve always preferred Freehand over Illustrator, Dreamweaver over GoLive, Flash over SVG. Ugh. This is just horrible. Photoshop, Acrobat and InDesign are my only preferred Adobe products. Ugh. This sucks.
re: transgeek
“I agree with those that are concerned. This is very bad for Apple. At NAB this weekend Adobe was all over the place with Dell. This nmerger will mean fewer pro applications for the Macintosh and that’s very bad for Apple. Apple should have bought Macromedia years ago in 01-02 when it’s value was less.
This is a major blow to Apple.It’s an anti-competive move by Adobe, but the Justice Department is unlikely to care. They will approve the merger without any problems.But the reality is, anyone could have seen this coming. It was just a matter of time before Microsoft or Adobe gobbled up Macromedia.”
If adobe does drop these apps for the mac platform then Apple will just create their own web suite!
This is exactly what they did when adobe dropped Premier et al for the mac.
Apple basically stuck 2 ‘fingers’ up at adobe and just developed final cut pro, dvd studio pro, motion and shake – which are now the standard apps in the movie industry.
Even the BBC use final cut pro for ALL their video post production.
I see nothing to worry about.
I think this sucks. I like Adobe fine but I also really like macromedias products. Both companies helped to push forward UI ideas. Now we are stuck with one way the Adobe way and nobody but a bunch of tiny players to compete.
I think the worst trend in software right now is the F-in Suite. They make the cost of individual products prohibitively expensive to push you to buy the suite which is prohibitively expensive.
I hate powerplays by already healthy companies. I like variatey in my apps/ I like Quark for layout. I like Photoshop and Illustrator for graphics. I love Flash, dreamweaver, and firworks for the web. I like each of there interfaces in different scenerios so the thought that everything would be the same annoys me.
Apple used to have a pretty decent WYSIWYG editor back in the day – Claris Home Page. Maybe it is time for them to revist that program, update it, and try to capture the market that is pissed about this merger.
For the Adobe bashers – Adobe ONLY dropped Premier for the Mac. And the reason they did that was because FCP was kicking its ass. Do not be alarmists and think that Adobe has ANY intention of going with Windows only. Never happen.
For the Freehand bashers – FU! In the 9 years I have used BOTH Illustrator and Freehand side by side, Freehand kicks Illustrators ASS – EVERY TIME!! You folks need to stop sucking Adobe’s teat. The only thing that is good for is Photoshop.
this is not good at all. I use both Illustrator and Freehand in my daily workflow – none of these apps are perfect but neither would have been what they are without the competitor. Freehand has the best/fastest modeling/work setup whereas Illustrator has the most exact tools ie. finishing setup. If Freehand gets ditched in favor of illustrator, I know quite some masses of big-name designers who’d run havoc. The only possitive outcome of this should be:
*Flash might someday get an interface/workflow that doesn’t suck
*Freehand tools might end up being more consistent/exact
*Fontographer might get updated (how many years is it now?)
*Flashplayer might get recoded for OSX – y’know…it’s not really as fast as under Windows
However, I’ve completely given up on the thought of efficient code. You guys remember Freehand 5.5? The fastest ever…and almost no bugs.
Same could be said of Photoshop. Damn do I miss Live Picture! 🙁
Apple bought Final Cut Pro from Macromedia years ago.
GoLive better get the knife and not Dreamweaver. Macromedia has always been a better company in my opinion to the Apple crowd than Adobe has been in the last 10 years.
re: Frenchie
Apple bought Final Cut Pro from Macromedia years ago.
Either way – Apple has moved it forward and have turned it into the best video suite out there.
Just look here – If you anything about video tou will cream your shorts!!!
http://www.apple.com/finalcutstudio
This just sucks, there is no other way of putting it. Adobe is GREAT at imaging as in PhotoShop, clearly the masters of the universe in that category, no doubt about it. On the other hand, Macromedia’s Dreamweaver is much preferable over GoLive from a web developing standpoint, let’s face it, Adobe are the print masters and Macromedia the Web Experts. I fear that they’ll drop some products or combine some and the outcome will leave a lot to be desired. Last, not least, Macromedia’s software was always much more affordable than Adobe’s and that’ll change,too, just about guaranteed. Let’s hope for a miracle that this merger will not happen!
Here is a story:
When printing from an early version of Adobe Acrobat Reader for OSX, you could Print (save) as PDF. In subsequent versions, Adobe disabled this feature. Why? Because this would enable Mac users to save as pdf a fillable form without purchasing the standard or professional version of Acrobat. They intentionally disabled a feature of the Mac OS X operating system in their pripoduct because it was by-passing the need for another lucrative Aodobe market. You could download a fillable pdf form, fill it out and print (save) it to pdf. Now you can’t.
hmmm…
Terrible news. This merger must be stopped. Otherwise it’s goodbye Freehand, goodbye Dreamweaver, goodbye competition.
Macromedia has always been a good competitor for Adobe and is to thank for the highly developed software we have today. The only reason Adobe want this deal is to sweep away alternatives to its software.
Personally, I have found Freehand a far more usable application that Illustrator – it is (was?) more intuitive and more based around a real technical drawing environment.
A sad day, Apple should have bought Macromedia.
If Adobe abandons us, I hope that Apple will step right up and develop proffesional products for Print and Web media as they have done for Video.
Apple should counter-offer $3.4 billion in CASH.
Is it possible to set up a “Save Macromedia from Adobe” campaign? We’re just about to get half our everyday software titles removed from existence!
If Apple wants to offer a web design application they should forget about Home Page and acquire Freeway instead.
Over the course of the last 2 hours (every since I learned of this disappointing and perhaps devastating news) I have tried to make sense of this in my own little head and have made an attempt to look behind the scenes. I have come to realize that this could be an effort in striking back at Apple’s (anticipated) huge product release over the weekend – that being FinalCut Pro 5, Motion 2, SoundTrack Pro, DVD Studio Pro 4 and Shake 4; effectively stomping Adobe out of the picture in the professional studios. Ceding this title to Apple, they are now moving on to another market that has captured the Mac platform – web development. For the last 3-4 years, Macromedia has had a huge amount of revenue generated from the Mac platform, ranging from 34%-52%. Those are not bad numbers considering the Mac’s supposed market share of 3-4%.
OK, maybe they are not ceding the title yet.
I just learned that they have now licensed rotoscoping technologies from Curious Software. I guess they intend to use the licensed technology to strengthen their professional offerings in future Adobe software titles. With this, ummm… new found technology from Curious, they will have a powerful paint engine for moving images, a sophisticated roto-matte system and a range of features for wire and rig removal or content restoration.
So it seems they are just striking back at Apple.
Anyone remember when Adobe (reluctantly) moved their applications to OSX? Even though PhotoShop was/is their #1 flagship program and everyone was screaming for it, it was the LAST program to go OSX.
Why? Competition! There is none for PhotoShop! So Adobe put PhotoShop on the back burner while concentrating on their other products that had competition.
Competition is good!
ron g –
i agree. i too think adobe is making this purchase to position itself better in relation to apple. that makes sense because, if apple had bought macromedia instead, imagine their increased threat to adobe! apple and adobe used to be close partners but i don’t think that has been the case for awhile now. this will be interesteing. however, i think users will be the losers (again).
hey. one more thing. i updated to OS X 10.3.9 this morning and i haven’t had a single pop-under today anywhere on the ‘net. anybody else notice this too? could it be from 10.3.9?