Getty has notified Shutterstock that it is terminating their merger agreement, even though the UK Competition and Markets Authority (CMA) granted conditional approval for the transaction earlier this year. The CMA's sign-off in May required Shutterstock to sell its editorial unit to an approved buyer as a condition for clearance.
The formal notice ending the agreement was delivered by Getty on Tuesday. Margot Daly, who chaired the independent inquiry panel overseeing the CMA investigation, characterized Getty's withdrawal as a commercial decision - noting the CMA's clearance rested on the remedies the companies had proposed in prior proceedings.
Throughout the CMA review, the regulator engaged with both firms on structuring the proposed sale of Shutterstock's editorial business. The authority also evaluated the suitability of several potential purchasers. Sources within the process indicated the sale discussions and buyer assessments had reached an advanced stage by the time Getty opted to terminate the agreement.
Both Getty and Shutterstock had previously projected that the merger would produce annual cost savings between $150 million and $200 million within three years after closing. The companies said those efficiencies would be driven mainly by their stock content operations, a segment in which the CMA reported no competition concerns.
However, the CMA's investigation concluded that combining Getty and Shutterstock would reduce competition for editorial content used by UK media outlets and could lead to price increases. The regulator received submissions from UK media organizations, publishers, competitors and content suppliers indicating that Shutterstock serves as one of the few meaningful alternatives to Getty - which the CMA identified as the market leader in editorial content in the UK.
Following Getty's notice to terminate the merger agreement, the CMA announced it would cease the remaining work on the case.
Context and implications
- The termination leaves in place the CMA finding that a combined Getty-Shutterstock editorial business would lessen competition in the UK editorial content market.
- The projected $150 million to $200 million of synergies - chiefly from stock content operations - were cited by the companies but will not be realized under the ended agreement.
- The regulator had actively engaged with potential buyers for Shutterstock's editorial unit and had advanced the evaluation process before the deal was called off.
Market signals
The CMA will stop its remaining work on the transaction following Getty's announcement. The termination was framed by the CMA chair of the inquiry as a business decision by Getty rather than a regulatory refusal to clear the deal.