Getty Images and Shutterstock, the two biggest companies in the stock photography industry, agreed to a merger in a deal valued at $3.7 billion. With the tie-up, the two companies are looking to cut costs and grow their business while being better positioned for the changing landscape in the industry caused by image-generating artificial intelligence tools.
According to the announcement, the combined company will continue to operate as Getty Images, with Getty’s current CEO, Craig Peters, serving as its top executive. It is expected to have $2 billion in annual revenue while saving $200 million in costs in the first three years after the deal closes.
“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,” Peters said in a statement.
Getty Images’ existing shareholders will own 54.7% of the new company, while Shutterstock shareholders will own 45.3%. Shutterstock shareholders will have an option to get $28.85 in cash for each common share they own or swap it for 13.67 shares of Getty Images’ common stock. They can also opt for a combination of the two, taking 9.17 shares of Getty Images’ common stock and $9.50 in cash for each Shutterstock common share they own.
Shutterstock’s stock opened on Wednesday up by 23% before plummeting more than 11%, closing at $30.67 per share. Getty Images shares went down by 17.55% to close at $2.63 per share after rising as much as 47%.