Getty Images and Shutterstock, two of the biggest names in the licensed visual content industry, have announced plans to merge, creating a $3.7 billion powerhouse
This was disclosed in a statement by Getty Images.
The merger is aimed at navigating the challenges and opportunities of the artificial intelligence (AI) era.
The deal will see the two companies combine resources to counter the rising threat posed by generative AI tools like Midjourney and OpenAI’s DALL-E, which can produce high-quality images and videos from simple text prompts.
Details of the merger
Under the terms of the agreement, Shutterstock shareholders have three options for compensation:
- $28.80 per share in cash,
- 13.67 shares of Getty Images stock, or
- A combination of 9.17 shares of Getty Images and $9.50 in cash per Shutterstock share.
The merger will result in Getty Images investors owning approximately 54.7% of the combined company, while Shutterstock stockholders will hold the remaining 45.3%.
- The combined company will have an eleven-member Board of Directors, comprised of Getty Images CEO Craig Peters, six directors designated by Getty Images and four directors designated by Shutterstock, including Paul Hennessy, Shutterstock CEO. The Chairman of the Board of Directors of the combined company will be Mark Getty, currently Chairman of Getty Images.
- Craig Peters, who will lead the combined company, said the merger would focus on bolstering content offerings, improving event coverage, and leveraging new technologies.
“Today’s announcement is exciting and transformational for our companies, unlocking multiple opportunities to strengthen our financial foundation and invest in the future—including enhancing our content offerings, expanding event coverage, and delivering new technologies to better serve our customers,” Peters noted.
Shutterstock’s CEO, Paul Hennessy expressed excitement about expanding the company’s content library and enhancing its product offerings through the merger with Getty Images. He highlighted the expected benefits for both companies’ customers and shareholders, including growth opportunities, product innovation, and cost synergies.
“We are excited about the opportunities to expand our creative content library and enhance our product offering to meet diverse customer needs.
We expect the merger to create value for the customers and stockholders of both companies by capitalizing on growth opportunities, driving combined revenues, accelerating product innovation, realizing significant cost synergies, and improving cash flow. We look forward to collaborating closely with the Getty Images management team to complete the transaction and drive the next phase of growth,” he said.
Anticipated benefits and challenges
The merger is expected to generate annual cost savings of $150 million to $200 million within three years of its completion.
The combined company, to be named Getty Images Holdings, will continue to trade on the New York Stock Exchange under the ticker symbol “GETY.”
- However, the deal is likely to attract antitrust scrutiny due to its potential impact on competition within the licensed visual content market, where Getty Images also competes with players like Reuters and the Associated Press.
- The announcement led to a significant spike in the companies’ stock prices. Shutterstock’s shares surged 26.5% in premarket trading, while Getty Images saw a 50.2% increase.
Despite this rally, both companies have faced years of declining stock performance, attributed to the proliferation of mobile cameras, which has reduced demand for stock photography
