The union of the two major content firms comes as artificial intelligence is shaking up the image market.
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Getty Images announced on Tuesday that it would buy rival Shutterstock to create a $3.7bn (€3.6bn) visual content company.
Getty will pay around $28.85 (€28) in cash for each Shutterstock share, meaning one Getty share is worth around 13.67 of the rival shares.
Alternatively, Shutterstock shareholders can choose to receive a mix of cash and Getty shares.
Getty Images shareholders will own about 54.7% of the combined company at closing and Shutterstock stockholders will own the rest.
Getty will pay $331mn (€321mn) in cash and 319.4 of its own shares for the transaction.
Changing business landscape
The merger comes at a time when companies that use still images are facing increased competition from images generated by artificial intelligence.
The companies said on Tuesday that they have complementary portfolios and that a merger will provide customers with a broader array of still imagery, video, music, 3D and other media.
“With the rapid rise in demand for compelling visual content across industries, there has never been a better time for our two businesses to come together,” Getty Images CEO, Craig Peters, said in a prepared statement.
Peters will serve as CEO of the combined business.
“We are excited by the opportunities we see to expand our creative content library and enhance our product offering to meet diverse customer needs,” Shutterstock CEO, Paul Hennessy, said.
The combined company will operate as Getty Images, and will continue to trade on the New York Stock Exchange under the ‘GETY’ ticker symbol.
Its board will have 11 members, comprised of Peters, six directors designated by Getty Images and four directors designated by Shutterstock, including Hennessy.
The chairman will be Mark Getty, current chairman of Seattle-based Getty Images.
Antitrust scrutiny
It’s possible that the merger will draw antitrust scrutiny due to the leading role played by both firms in the visual content market.
Some analysts are therefore viewing the deal as a litmus test for the direction of the new Trump administration on industry consolidation.
While Biden’s team blocked a number of major mergers, some hope that the incoming president will be more lenient.
