Getty deal is picture-perfect M&A for 2025
08/01/2025 13:00
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
By Robert Cyran
NEW YORK, Jan 7 (Reuters Breakingviews) - Getty Images’
GETY.N $3.7 billion merger, including debt, with rival stock
image seller Shutterstock SSTK.N is a picture-perfect template
for more deals. Three big factors – potentially looser
competition policing, the rise of artificial intelligence, and
the benefits of combining aging tech stragglers – argue in favor
of tie-ups. Key, though, is whether investors give buyers a long
enough leash to strike acquisitions. Given the warm reception to
the Tuesday announcement, which touts hefty savings, the scene
is set.
The outgoing administration of President Joe Biden was a
nightmare for dealmakers. For four years, trustbusters opposed a
host of combinations on novel legal grounds, slow-rolling
approvals to boot. While his last term wasn’t quite a
laissez-faire free-for-all, if President-elect Donald Trump
returns to type, predictability and somewhat looser standards
can be expected. That doesn’t eliminate uncertainty, especially
for firms Trump views unfavorably, but it’s promising for
mergers of head-to-head competitors in narrow markets like
serving up snapshots.
And Getty could use a deal. Its stock had fallen 58% over
the year to Jan. 2, the day before Bloomberg reported the
companies were considering a tie-up. Its EBITDA is expected to
come in at around $310 million in 2026, according to Visible
Alpha data, roughly zero growth since 2021. It carries roughly
four times that much in debt.
That’s a bad position to be in during a time of likely
upheaval. The rise of AI has given users the ability to quickly
generate their own images with no skill, or photographers,
required. There is an opportunity here: data-ravenous
intelligence models could raise the value of Getty and
Shutterstock’s catalogs, and the buyer touts its own generative
AI service. But if cheap, bespoke artificial images satisfy
customers, they could destroy demand. It makes sense to team up
to bolster the upside.
There are also big savings in combining aging stragglers.
Getty says that, together, the two companies can slash up to
$200 million annually in costs. It’s paying for Shutterstock in
a combination of cash and stock, leaving its investors with a
54.7% stake in the merged firm. That means that the deal’s
synergies, taxed at the standard U.S. corporate rate and
capitalized, are worth $865 million to them. That’s roughly
Getty’s market capitalization prior to deal news breaking.
No wonder the buyer’s stock was up nearly 25% in late
morning trading. The stock-image peddler has captured an ideal
snapshot of a new wave of dealmaking.
Follow @rob_cyran on X
CONTEXT NEWS
Getty Images said on Jan. 7 that it had agreed to acquire
rival stock image company Shutterstock. The target’s
shareholders can opt for cash, stock or both, but Getty will pay
aggregate consideration of $9.50 and 9.17 shares of its own
stock for each share of Shutterstock. Upon closing of the deal,
Getty shareholders will own approximately 54.7% of all shares.
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M&A assuages Getty shareholders' recent pain https://reut.rs/3BXVfDb
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(Editing by Jonathan Guilford and Pranav Kiran)
((For previous columns by the author, Reuters customers can
click on CYRAN/
robert.cyran@thomsonreuters.com))