We've owned multiple versions of the software made by both of these vendors over the years, this is huge news. They do make some overlapping tools (Dreamweaver vs. whatever the Adobe HTML program is called these days GoLive). Will be interesting to see how that shakes out.
WSJ.com - Adobe Systems Buys Macromedia In Stock Deal:
Adobe Systems Inc. announced the acquisition of Macromedia Inc. for $3.4 billion in stock in a deal that will bring together the software of two companies with broad resources to distribute documents, video and other media to personal computers, cellphones and hand-held devices.
The transaction, part of the long-expected consolidation in the software industry, also could set the stage for an anticipated showdown with Microsoft Corp., of Redmond, Wash.
Under the terms of the deal, Macromedia holders would receive 0.69 Adobe share for each Macromedia share, the companies said. That represents a purchase price of $41.86 a share, or a premium of 25% to Macromedia's $33.45 share price in 4 p.m. Nasdaq Stock Market trading on Friday.
The companies said both boards had approved the transaction, which is expected to close in the fall, subject to regulatory approvals and the approval of shareholders of both companies.
Bruce Chizen, Adobe's chief executive, who is 49 years old, will hold that post with the combined company. He said in an interview that the cultures of the two companies, both of which cater to designers and other creative professionals, are so similar that “we are probably twins separated at birth.” Macromedia CEO Steven Elop, also 49, will become Adobe's president of world-wide field operations. The two said their deal is based on growth opportunities, not cost-cutting....
Microsoft already regards PDF's success as a long-term threat. The next version of Windows, code-named Longhorn and due out next year, is expected to include features to move documents around companies and the Internet, and aimed at eliminating the need for PDF.
... The deal also represents the culmination of a rapprochement after the two companies settled in 2001 a bitter patent-infringement suit filed in 2000. Mr. Chizen said the two companies first held preliminary merger discussions several years ago.
