Getty Images Holdings Inc. has reached an agreement to acquire competitor Shutterstock Inc., a move that will generate a combined company valued at approximately $3.7 billion (around Rs. 31,760 crore), including its debt obligations.
The acquisition proposal entails Getty Images offering about $28.85 (approximately Rs. 2,476) in cash or roughly 13.67 shares of Getty Images for every share of Shutterstock. This was confirmed in a statement released on Tuesday, aligning with an earlier report by Bloomberg News. Shareholders of Shutterstock will also have the option to receive payments in a combination of cash and stock from Getty.
Getty Images is projected to disburse around $331 million (approximately Rs. 2,841 crore) in cash along with 319.4 million shares of its stock for the purchase. Once the transaction finalizes, Getty Images shareholders are expected to hold about 54.7 percent of the newly formed entity, while former Shutterstock shareholders will hold the remaining stake. Craig Peters, the CEO of Getty Images, is set to continue in that position for the combined company.
This merger unites two leading providers of licensed visual content in the United States amid significant shifts in the content-creation landscape due to advancements in artificial intelligence and the increasing ubiquity of smartphone cameras, which have impacted the market value of stock photography. The acquisition will integrate Getty Images’ extensive library of photographs, illustrations, and videos with Shutterstock’s vast searchable platform that facilitates contributions from various media creators.
As of Monday’s closing, Getty Images—burdened with around $1.4 billion (approximately Rs. 12,017 crore) in debt—had experienced a 73 percent decline in market value since its public listing in July 2022 via a merger with a special purpose acquisition company. Meanwhile, Shutterstock’s market valuation had dropped by about 50 percent during the same period. Following Tuesday’s announcement, Shutterstock shares surged by as much as 44 percent in premarket trading, while Getty Images shares experienced an increase of up to 100 percent.
Both companies believe that their merger will lead to cost reductions and improved profitability by providing a more comprehensive range of services tailored for the media, advertising, and content creation sectors.
Antitrust Considerations
The merger will serve as a preliminary evaluation of the new administration’s stance on antitrust issues, particularly regarding mergers among key players in relatively concentrated industries. This follows the Biden administration’s prior rejection of notable deals in the grocery and airline industries. While this particular transaction is expected to attract significant scrutiny, it highlights the optimism among investors and deal facilitators that regulators may adopt a more lenient approach in specific fields.
Getty Images, headquartered in Seattle, was co-founded in 1995 by Chairman Mark Getty, a member of the prominent Getty family. He holds a directing position at Getty Investments, which reportedly commands about 43 percent of the company’s outstanding shares, as per Bloomberg data.
Over the years, Getty Images has navigated the public markets and undergone multiple ownership changes. It was taken private by Hellman & Friedman in 2008 and sold four years later to Carlyle Group Inc. In 2018, the Getty family regained control, subsequently selling a minority share that same year to the investment arm of Koch Industries Inc. In 2021, they concurred to merge the company with a blank-check firm associated with CC Capital and Neuberger Berman.
Berenson & Co. and JPMorgan Chase & Co. are serving as financial advisers for Getty Images, while Shutterstock has enlisted Allen & Co. for advisory support.
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