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Adobe completes acquisition of Macromedia

Frequently asked questions


Company operations

What is the name of the combined company and what is its stock trading symbol?

The combined company, Adobe Systems Incorporated, is traded on the Nasdaq National Market under the symbol ADBE.

Macromedia's common stock, formerly traded on the Nasdaq National Market under ticker symbol MACR, ceased trading on December 5, 2005, in conjunction with the close of the acquisition. For more information on Macromedia stock and conversion to Adobe stock, see the questions in this FAQ under "Stockholder information."


How is the combined company structured?

The company will continue to operate its business in a centralized fashion with its corporate functions (G&A, marketing, etc.) managed out of Adobe's San Jose, California-based headquarters.

Adobe's six business units align key products and technologies with core customer segments:

  • The Creative Solutions Business Unit will provide solutions for customers, ranging from creative professionals to high-end consumers, with leading brands such as Adobe® Creative Suite, Macromedia® Studio, Adobe Photoshop® and Photoshop Elements, Adobe InDesign®, Adobe Illustrator®, Macromedia Dreamweaver®, Adobe GoLive®, Macromedia Flash®, Adobe Premiere® Pro, and Adobe After Effects® software.
  • The Enterprise and Developer Solutions Business Unit will provide solutions for enterprises and developers with products such as the Adobe LiveCycle™ and Macromedia ColdFusion® and Flex™ product lines.
  • The Knowledge Worker Solutions Business Unit will provide collaboration and communication solutions with products such as Adobe Acrobat® and Macromedia Breeze® software.
  • The Mobile and Device Solutions Business Unit will provide solutions for mobile and device developers such as Macromedia Flash Lite™ and FlashCast™ software and the Flash Player SDK.
  • The Platform Business Unit will focus on advancing Adobe's PDF and Flash-based technology platforms as standards for creating, managing, and delivering compelling, actionable applications and content to any desktop or device.
  • The Print and Classic Publishing Solutions Business Unit will provide print and online publishing solutions and e-learning tools with products such as Adobe PostScript® technology as well as Adobe FrameMaker®, Adobe PageMaker®, Macromedia Contribute™, Macromedia Captivate™, and Macromedia FreeHand® software.

Who is Adobe's key senior management team?

At this time, the company has named the following individuals as part of the management team:

The company will continue to make key management announcements as its organizational structure evolves. For biographies of Adobe's leadership team, go to Executive profiles.


Are there changes to Adobe's board of directors?

Rob Burgess, formerly chairman of Macromedia's board of directors, has joined Adobe's board. Dr. John Warnock and Dr. Charles Geschke remain co-chairmen of Adobe's board of directors.

Other members of Adobe's board of directors are:


Where is company headquarters?

Adobe's headquarters are located at 345 Park Avenue in San Jose, California. Macromedia's facility at 601 Townsend in San Francisco remains a key site for the combined company.


Where will Adobe's development sites be located?

Adobe will continue to operate major development sites in North America including: San Francisco, San Jose, and San Diego, California; Seattle, Washington; Newton, Massachusetts; Arden Hills, Minnesota; and Ottawa, Ontario. Outside North America, Adobe will continue to operate major development sites in Bangalore and Noida, India; Hamburg, Germany; and Tokyo, Japan.


Will there be a reduction in force as a result of this acquisition?

Yes. During the week following the close of the transaction, Adobe will begin eliminating positions from the combined workforce. The reduction will eliminate duplicate positions and enable Adobe to reprioritize headcount resources as it positions the combined company for long-term success.

Charges and headcount impact associated with the reduction in force, as well as other costs related to the acquisition, will be discussed during Adobe's fiscal 2005 year-end earnings conference call, scheduled for December 15, 2005.


How is Adobe providing for employees who are not staying with the company?

Adobe is committed to making the transition for employees as smooth as possible. In the U.S., it is our intent to begin notifying all employees as soon as possible after the closing of the transaction. Detailed information on benefits will be provided directly to employees. Employees outside the U.S. will be advised on next steps by their managers. In order to assist employees with this career transition, Adobe has retained the services of Drake Beam Morin (DBM), a global outplacement provider.


Adobe and Macromedia both have operations in several of the same cities and regions. Will there be facilities closures?

We have made key facilities decisions and will consolidate in a number of locations where duplication exists. As we work through the integration process, we will continue to evaluate where consolidating facilities may make sense, based on our hiring plans and the locations of our customers.

Strategy and integration

What is Adobe's mission?

Our mission is to revolutionize how the world engages with ideas and information. By acquiring Macromedia, we are strengthening this mission by making it easier for customers to create, manage, and deliver their ideas and engage with information of all types — in print, on the web, in video, and across mobile devices. We believe in enabling powerful, effective, and meaningful digital experiences across multiple operating systems in the broad span of diverse industries we serve.


Why did Adobe acquire Macromedia?

Together, we are building on a shared heritage of redefining the way people and businesses communicate, and the similar vision of enabling the creation and delivery of compelling content and experiences across multiple operating systems, devices, and media. Acquiring Macromedia accelerates Adobe's strategy of delivering an industry-defining technology platform that provides more powerful solutions for engaging people with digital information. This platform meets a broader set of customer needs than either company could address on its own. And, through the enormous reach of Adobe Reader® software and the Macromedia Flash Player, we have access to a larger total addressable market and significant long-term growth opportunities — especially in emerging areas such as mobility, the enterprise, and the web.


What will happen to the Macromedia corporate brand? What will happen to product and technology brands, such as Dreamweaver and Flash?

To provide the most consistency and clarity in our communication with customers, the Macromedia corporate brand will immediately be retired, and the company will fully align behind the Adobe corporate brand.

Adobe will continue investing in key Macromedia product brands. Initially, product brands acquired from Macromedia will include the Macromedia name (for example, "Macromedia Dreamweaver"). Over time, Macromedia products will migrate to the Adobe brand (for example, "Adobe Dreamweaver") during planned release cycles when packaging materials and user and marketing collateral are updated.


Does Adobe plan to acquire other companies?

Adobe continually explores opportunities that support our long-term strategy.


When will Adobe provide a product roadmap?

Adobe has taken the first step in combining the two companies' product portfolios with the announcement of three new product bundles for design, web, and video software solutions. By combining the publishing strength of Adobe Creative Suite 2 and Adobe video solutions with the interactivity of Macromedia Flash Professional 8 and Macromedia Studio 8 software, we're enhancing customer capabilities to deliver compelling content and digital experiences — in print, on the web, in video, and across mobile devices.

Much of Adobe's long-term product strategy is evidenced in the new business unit structure now in place. As a matter of practice, we don't preannounce products or development schedules.


Why is Adobe confident that integration of the two companies will be smooth?

The combination of Adobe and Macromedia integrates two healthy, profitable companies with similar cultures and value systems. Both share a passion for innovation and a commitment to developing and delivering customer-driven software. Both also value integrity, customer focus, innovation, leadership, operational excellence, teamwork, a dynamic work environment, and contributing to the communities in which employees live and work.

Products/technology

What is the new industry-defining technology platform resulting from the combination of Adobe and Macromedia technology?

Leveraging the combined reach of Adobe Reader and the Macromedia Flash Player, Adobe's engagement platform will provide the client, programming model (including open standards such as PDF and SWF), and open APIs required to create, manage, and deliver rich Internet applications. It will build on existing infrastructure, standards, and skills, enabling the integration of complex content and technologies without sacrificing scale or efficiency. Because it scales from mobile devices to high-end servers, our platform will meet a broader set of customer needs than either company could have addressed on its own.


Are there immediate plans to discontinue any Adobe or Macromedia products?

All products continue to be available for purchase. We are a customer-driven company and, as always, we will continue to evaluate and respond to customer demand to shape our product mix.

How will the product portfolios be integrated over time?

Initially, Adobe will offer combinations of products that provide specific solutions, such as the product bundles announced at the time of the acquisition close. After that, product integration requiring engineering enhancements will come in the first 12 to 18 months as part of regularly scheduled product upgrade cycles.


What are Adobe's plans for Flash Player and Adobe Reader?

Our long-term plan is to develop a "universal client" by combining PDF, Flash and HTML in a single, integrated runtime. Of course, we will continue delivering the Flash Player as a small, efficient runtime for content and applications on the web, and Adobe Reader for viewing and interacting with PDF documents and forms. The integration of these technologies into a unified framework creates a ubiquitous platform that runs on virtually every device, and dramatically expands the opportunities to create compelling solutions.


Will product release cycles be affected?

In general, product release cycles will not be affected except in cases where we have opportunities to develop enhanced integration features.


How does Adobe's acquisition of Macromedia affect Adobe's support of SVG (Scalable Vector Graphics)?

Both Adobe and Macromedia have been part of the W3C working group that defined the SVG-t specification. While Flash and Flash Lite have gained critical momentum with customers and partners worldwide, particularly in the fast-growing mobile market, we recognize that both SVG and Flash have had success globally. As a result, Adobe will continue to support the display of popular graphics standards, including SVG-t and Flash, to meet the needs of customers and partners worldwide.


Where can I get more information on Adobe's acquisition of Macromedia?

Updates are available via the Adobe/Macromedia acquisition page.

Customer and partner support

What benefits can customers expect from the combination of Adobe and Macromedia?


How will I know if there is a change to my sales account team?

Customers will be notified if there are any changes to their account teams.


How long will training and support be available for Macromedia products?

Adobe is committed to Macromedia customers and believes both training and support are critical components of providing a complete customer solution. Adobe plans to continue this philosophy.


Whom should customers call for product support?

We will be working to quickly align our infrastructures, including our customer contact points. Meanwhile, please continue using the existing contacts, and Adobe will ensure your inquiry is routed to an agent who can handle your issue. For more information on contacting Adobe, visit Adobe.com and click "Contact Us."


Does Adobe plan to increase its focus on developers as a result of the acquisition?

Yes. Adobe now has a large community of more than one million developers as well as an extended ecosystem of user groups, book publishers, certification programs, conferences, and trainers. Adobe will offer numerous resources, tools, and programs — including continuing all websites, tutorials, forums, and other resources formerly run separately by Macromedia and Adobe — to support and build up this community. Additionally, moving forward, developers will play a key part in the proliferation of Adobe's engagement platform for the creation and deployment of compelling, actionable applications and content to any desktop or device. Developers will be able to count on a universal client that is cross-browser, cross-platform, and cross-device, as well as tools and technologies that support the entire development workflow.

Transaction and financial details

When did the acquisition close?

The transaction closed on December 3, 2005.


What were the terms of the acquisition?

Adobe acquired Macromedia in an all-stock transaction valued at approximately $3.4 billion on the acquisition announcement date. Under the terms of the agreement, Macromedia stockholders received, at a fixed exchange ratio and in a tax-free exchange, 1.38 shares of Adobe common stock for each share of Macromedia common stock. (The figure 1.38 reflects Adobe's two-for-one stock split paid on May 23, 2005, to Adobe stockholders of record as of May 2, 2005.)


When will Adobe provide financial targets for fiscal 2006?

Fiscal year 2006 financial targets for the combined company will be provided in conjunction with reporting of Adobe's fiscal 2005 fourth quarter and year-end financial results on December 15, 2005.


What is Adobe's fiscal reporting calendar?

Adobe's fiscal year 2005 closed on December 2, 2005, and its fiscal year 2006 began the following day. The combined company will operate on Adobe's fiscal calendar.

Stockholder information

What happens to Macromedia stock upon the close of the acquisition?

As a result of the acquisition, shares of Macromedia were converted into the right to receive 1.38 shares of Adobe stock, and Macromedia stock is no longer being traded.


What do I need to do to exchange my Macromedia stock certificates for Adobe stock?

The process of exchanging Macromedia shares for Adobe shares depends on the manner in which you hold your Macromedia shares.

Holders of Macromedia stock certificates:

If you hold physical certificates representing shares of Macromedia stock, you will receive a letter of transmittal from Computershare Trust Company of New York, the exchange agent for the Adobe/Macromedia acquisition. The transmittal letter will detail the procedures for Macromedia stockholders to exchange their certificates for Adobe common stock certificates and to exchange any fractional share for cash.

Please allow approximately two weeks to receive your Letter of Transmittal. If you believe that Macromedia and its transfer agent do not have your current address or you have not received a Letter of Transmittal in the time frame above, contact Computershare at 212-701-7600 to request a new Letter of Transmittal.

Please note that if you hold shares through a bank or broker you will not receive a Letter of Transmittal and do not need to complete a Letter of Transmittal.

Holders of Macromedia stock through banks or brokers ("street name"):

If you hold shares through a bank or broker, your bank or broker will handle the conversion of your shares. You do not need to take any action. Note that some banks or brokers may compute the cash in lieu of fractional shares slightly differently.


What is a fractional share of Adobe stock worth?

The price of Adobe common stock upon which fractional share cash payments will be based is $34.97, the closing price of Adobe common stock on Friday, December 2, 2005.


What are the tax consequences relative to the exchange of my shares?

The acquisition has been structured to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. As a result, Macromedia stockholders will not recognize gain or loss for United States federal income tax purposes upon the exchange of shares of Macromedia common stock for shares of Adobe common stock, except with respect to cash received in lieu of fractional shares of Adobe common stock. Tax matters are very complicated, and the tax consequences of the acquisition to a particular stockholder will depend in part on such stockholder's circumstances. Accordingly, you should consult your own tax adviser for a full understanding of the tax consequences of the acquisition to you, including the applicability and effect of federal, state, local, and foreign income and other tax laws.


What is the tax consequence relative to a fractional share?

Cash payments received by Macromedia stockholders in lieu of fractional shares will be treated as if such fractional shares of Adobe common stock were issued in the acquisition and then sold. A Macromedia stockholder who receives such cash will recognize gain or loss equal to the difference, if any, between such stockholder's basis in the fractional share and the amount of cash received. Such gain or loss will be a capital gain or loss, and any such capital gain will be a long-term capital gain if the Macromedia common stock is held by such stockholder for more than one year. Tax matters are very complicated, and the tax consequences of the acquisition to a particular stockholder will depend in part on such stockholder's circumstances. Accordingly, you should consult your own tax adviser for a full understanding of the tax consequences of the acquisition to you, including the applicability and effect of federal, state, local, and foreign income and other tax laws.


As a holder of Macromedia common shares, what do I receive as a result of the acquisition?

As a result of the acquisition, Macromedia stockholders will receive 1.38 shares of Adobe common stock for each share of Macromedia common stock they own. For example, if you own 100 shares of Macromedia common stock, you will receive 138 shares of Adobe common stock in exchange for your Macromedia shares. Macromedia stockholders will also receive a cash payment in lieu of any fractional share of Adobe common stock.


Will Adobe buy back my shares?

No. Macromedia stockholders will receive 1.38 shares of Adobe common stock for each share of Macromedia common stock they own. Macromedia stockholders will also receive a cash payment in lieu of any fractional share of Adobe common stock.


What will Macromedia option holders receive in the merger?

Subject to certain exceptions, each Macromedia stock option that is outstanding and unexercised immediately prior to the closing will be converted into an option to purchase Adobe common stock. Adobe will assume that stock option (or will replace that stock option by issuing a materially equivalent replacement stock option to purchase Adobe common stock) in accordance with the terms of the applicable Macromedia stock option plan and terms of the stock option agreement relating to that Macromedia stock option.

Additional stockholder information and where to find it:

For additional information, see www.adobe.com/adbe.