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Adobe Announces Purchase of Macromedia for $3.4B
Published on April 18, 2005

Leading content creator Adobe Systems announced Monday morning that it will purchase rival Macromedia in an all-stock transaction worth $3.4 billion.

Adobe, which is best known for its graphical arts program Photoshop and its PDF readers, will now be able to offer more powerful and diverse content with the Macromedia acquisition.

The San Francisco-based Macromedia is the producer of the widely-used Dreamweaver web page creator and Flash media producer, along with the web graphics program Fireworks, which competes in that space against Photoshop.

"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. "By combining our powerful development, authoring and collaboration software - along with the complementary functionality of PDF and Flash - Adobe has the opportunity to bring this vision to life with an industry-defining technology platform."

Under the terms of the agreement Macromedia stockholders will receive 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 or 18% ownership of the company.