Getty Images To Merge With Shutterstock For 3 Big Reasons; Adobe Dips

Getty Images (GETY) and Shutterstock (SSTK) agreed to a $3.7 billion combination, uniting the companies that license their libraries of photographs and other visual content. Both stocks soared on the news, though GETY saw a more sizable gain. Meanwhile, Adobe (ADBE) traded slightly lower early Tuesday, as the provider of design tools and licensing of visual content may face a stronger competitor.

"Today's announcement is exciting and transformational for our companies, unlocking multiple opportunities to strengthen our financial foundation and invest in the future — including enhancing our content offerings, expanding event coverage, and delivering new technologies to better serve our customers," said Getty Images CEO Craig Peters.

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Getty-Shutterstock Deal Rationale

The deal takes shape in the waning days of the Biden administration, which has held a tough stance on antitrust. President-elect Trump's appointments are generally expected to be more measured.

The companies expect the deal to be a big money-saver, to the tune of $150 million to $200 million per year in operating and capital expenses between the two companies, the statement said.

The combined operations also will present a more considerable competitor for big technology companies that are leveraging generative artificial intelligence to transform the creation of visual content and could disrupt the marketplace. The merger announcement highlights the "fast-evolving and highly competitive environment."

Getty-Shutterstock Deal Terms

Shutterstock investors will receive $28.85 per share in cash for each share they own. However, Shutterstock shareholders can elect to receive GETY stock, or a combination of cash and stock as an alternative.

After the deal closes, Getty shareholders will own approximately 55% of the combined company. Peters will serve as CEO.

GETY, SSTK, ADBE

GETY stock leapt 45% in early Tuesday stock market action, while Shutterstock jumped 26%.

Both Getty and Shutterstock have been in prolonged slumps. Shutterstock is down more than 75% from its peak in 2021, while Getty shares are off more than 90%.

ADBE stock inched just 0.3% lower. However, Adobe shares closed at an 18-month low last week after UBS cut its ADBE price target to 475 from 525, noting the "fiercely competitive" creative AI market.

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