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Adobe to acquire Macromedia in $3.4 billion deal

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SAN JOSE, Calif. (AP) _ Adobe Systems Inc., one of the world's largest providers of document-design software, will acquire Macromedia in an all-stock transaction valued at approximately $3.4 billion, the companies announced Monday.

Under terms of the deal, approved by the companies' boards of directors, Macromedia stockholders will receive 0.69 shares of Adobe common stock for every share of their Macromedia common stock. That will result in Macromedia stockholders owning about 18 percent of the combined company when the deal closes.

The transaction, contingent upon the approval of both companies' stockholders, is expected to be complete by the fall. It also requires the approval of federal regulators.

San Jose-based Adobe's software includes the popular Acrobat and Photoshop program. San Francisco-based Macromedia makes the Dreamweaver and Flash web-design software.

Combining the two businesses, the companies said, will allow them to create more powerful software programs that can be used across multiple operating systems, which should pave the way for expansion into new markets.

``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 Bruce Chizen, chief executive officer of Adobe.

Chizen will remain as chief executive of the combined company and Adobe's Shantanu Narayenb will continue as president and chief operating officer. Macromedia CEO Stephen Elop will join Adobe as president of worldwide field operations.

The companies said they are in the midst of developing ``integration plans'' that will build on their similarities. They made no mention of layoffs.

Adobe employs 3,700 people in offices around the world. It reported revenues of $1.295 billion for fiscal 2003.

``While we anticipate the integration team will identify opportunities for cost savings by the time the acquisition closes, the primary motivation for the two companies' joining is to continue to expand and grow our business into new markets,'' Chizen said.
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