Getty Images and Shutterstock, two leading players in the licensed visual content industry, have announced plans to merge in a deal valued at $3.7 billion. This move comes as both companies look to address the challenges posed by generative AI tools such as Midjourney and OpenAI’s DALL-E, which create high-quality images and videos from text prompts.
Under the terms of the agreement, Shutterstock shareholders can choose between cash, stock, or a combination of both as compensation. The merger will result in Getty Images investors owning 54.7% of the combined entity, which will be led by Getty Images’ CEO Craig Peters. The new company, Getty Images Holdings, is expected to drive innovation in content offerings, expand event coverage, and leverage AI technologies to serve customers more effectively.
The merger is expected to generate annual cost savings of $150 million to $200 million within three years, with a focus on enhancing product offerings and creating value for customers and shareholders. However, the deal may face antitrust scrutiny, given its impact on competition in the visual content market, which includes other players like Reuters and the Associated Press.
Stock prices for both companies saw significant increases following the announcement, with Shutterstock shares surging 26.5% and Getty Images rising 50.2%.
