Getty Images has abandoned its £2.8 billion merger with Shutterstock after the UK's Competition and Markets Authority (CMA) ruled that the deal could only proceed if Getty sold off Shutterstock's editorial business. The two companies had agreed to the merger in January, aiming to create a combined entity worth $3.7 billion (£2.8 billion). However, the CMA raised concerns that the merger would reduce competition in the UK market for licensed images, potentially leading to higher prices and less choice for media outlets.
CMA Condition and Getty's Response
In May, the CMA indicated it would approve the merger only if Getty divested Shutterstock's editorial arm, which supplies content to news organizations. Getty stated in a regulatory filing late Tuesday that it was unwilling to accept this condition, leading to the termination of the merger agreement. The company noted that it was not required to accept the condition under the terms of the merger agreement and that its board would retain a financial adviser to explore strategic financing alternatives.
Market Reaction
Following the announcement, Getty Images shares fell 4% in early trading on Wall Street, while Shutterstock's stock plummeted 28%. The CMA responded by stating that the decision to abandon the merger was a commercial one for Getty. A CMA spokesperson added that the regulator had been working closely with both companies on the proposed sale and had been engaging with potential buyers, with the process at an advanced stage at the time of Getty's announcement.
Industry Concerns
During its initial investigation, the CMA heard widespread concerns from businesses, trade associations, and stakeholders across the UK media and creative sectors. The News Media Association, whose members publish around 900 media titles in the UK and rely on licensed imagery, was among those expressing worries about the merger's impact on competition and pricing.
