Getty Images and Shutterstock are merging in a $3.7 billion deal. The move aims to tackle the growing threat from AI tools like Midjourney and DALL-E, which can create high-quality images and videos from text prompts. The deal will combine the strengths of both companies to better adapt to the AI-driven landscape.
Under the terms of the merger, Shutterstock shareholders have three options: $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. Getty Images will own about 54.7% of the combined company, with Shutterstock shareholders holding the rest. The new entity will be called Getty Images Holdings.
Getty Images CEO Craig Peters will lead the combined company. The board will have 11 members, including six from Getty Images and four from Shutterstock. Paul Hennessy, Shutterstock’s CEO, will also play a key role. Mark Getty, Chairman of Getty Images, will be the Board Chairman.
Peters sees the merger as a way to boost content offerings and explore new technologies. He believes it will strengthen the companies’ financial foundation and enhance their future growth. Hennessy shares that view, focusing on expanding Shutterstock’s content library and improving product offerings. Both CEOs are excited about the potential for growth, innovation, and cost synergies.
The merger is expected to generate $150 million to $200 million in annual cost savings within three years. The combined company will continue to trade under the ticker symbol “GETY” on the New York Stock Exchange.
However, the deal may face antitrust scrutiny due to its impact on competition in the visual content market. This sector already includes players like Reuters and the Associated Press.
The announcement led to a surge in stock prices. Shutterstock’s shares jumped 26.5%, while Getty Images saw a 50.2% increase. Despite this boost, both companies have struggled with declining stock performance in recent years. The rise of mobile cameras has reduced demand for stock photography, affecting their revenues.
The merger between Getty Images and Shutterstock signals a shift in the visual content industry, with AI playing a central role in the future.