A Getty Images agreed to purchase rival Shutterstockan image banking company based in New York, in a deal that could create an industry giant worth $3.7 billion, including debt.
The company is offering $28.85 in cash or 13.67 shares for each Shutterstock security, according to a statement issued Tuesday. In total, the Getty Images must shell out about $331 million in cash and $319.4 million of its own securities, with Shutterstock shareholders able to choose to be paid both ways.
When the deal is completed, Getty Images shareholders should own around 54.7% of the new giant that will emerge from the combination of the two companies, while the remaining shares will be dispersed among Shutterstock shareholders. Getty Images CEO Craig Peters is expected to take the lead at the new company, according to Bloomberg.
This merger takes place at a time when the sustainability of the two companies’ image bank services is being threatened by artificial intelligence (IA). The ability to create copyright-free images that this technology offers has left the businesses of Getty Images and Shutterstock obsolete and the challenge now is to combine the former’s extensive library of photographs, illustrations and videos with the extensive search platform which allows users to upload their own content from the second.
The main objective of this merger is to manage to cut costs and increase profitsat a time when both companies have already lost more than half of their stock market value since June 2022. Investors are reacting enthusiastically to this deal, with Shutterstock shares soaring 22.88% to US$36, 90 and those from Getty Images catapulting 25.54% to US$3.22 each.
The agreement has yet to get the “green light” from the US supervisor, but it is expected to serve as a initial test to assess how receptive Donald Trump’s administration will be to mergers in extremely concentrated sectors. This is after Joe Biden’s team, the current president, blocked several deals in sectors such as retail and airlines.
Source: www.jornaldenegocios.pt
