𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Getty Images has scrapped its £2.8 billion merger with rival Shutterstock after Britain’s competition watchdog ruled a significant divestment was necessary for the deal to proceed.

The Competition and Markets Authority (CMA) had demanded the sale of part of the business to grant approval.

The proposed tie-up, agreed in January, sought to unite two of the biggest players in the images and video market.

However, the CMA quickly raised concerns over the combined entity’s potential dominance and its impact on editorial content, warning it could lead to less choice and higher prices for UK customers.

In May, the watchdog stated it would approve the acquisition only if Getty sold off Shutterstock’s editorial arm, which supplies content to news outlets.

The CMA’s inquiry group found that without this disposal, the merged business would limit UK media outlets’ choices and could increase prices.

In a regulatory filing late on Tuesday, Getty confirmed it was not prepared to sell Shutterstock’s editorial division, thereby calling off the merger.

It said: “The UK Competition and Markets Authority conditioned its required clearance of the transactions contemplated by the merger agreement upon a sale of Shutterstock’s editorial business.

“Getty Images is not required to accept that condition under the terms of the merger agreement.”

It said the Getty board would keep a financial adviser on to offer advice on “strategic financing alternatives”.

New York-listed Getty saw its shares fall 4 per cent soon after market opening on Wall Street, while Shutterstock’s stock plunged by more than a quarter, down 28%.

The CMA said that “any decision by Getty to abandon the merger is a commercial one”.

A spokesman for the regulator added that it “cleared the merger on the condition that Getty sells Shutterstock’s editorial business – something they initially offered to do at an earlier stage of proceedings”.

They said: “We’ve been working closely with Getty and Shutterstock on the proposed sale and have been engaging with potential buyers to assess their suitability.

“That process was at an advanced stage at the time of Getty’s announcement.”

During the CMA’s initial probe into the merger, it said it heard “widespread concerns” from businesses, trade associations and other stakeholders across the UK media and creative sectors about the potential impact of the deal.

They included concerns from the News Media Association, whose members publish around 900 media titles in the UK and rely on licensed imagery.