Image credit: Grok/X

Getty Images and Shutterstock, key players in the stock imagery sector, have announced a merger valued at $3.7 billion, aiming to fortify their position in the market against the encroaching challenge of AI-generated content.

This move is expected to face significant antitrust scrutiny given the scale of the new entity in the visual content industry.

The merger is positioned as a strategic response to the rise of generative AI technologies like Midjourney, which are increasingly used for creating images, potentially disrupting traditional stock photography business models.

Under the terms of the merger, Shutterstock shareholders have the choice to receive $28.80 per share in cash, 13.67 shares of Getty Images stock, or a mixed option of 9.17 Getty shares plus $9.50 in cash per Shutterstock share.

This deal values Shutterstock's stake at over $1 billion, according to Reuters.

The announcement led to a significant boost in stock prices, with Shutterstock's shares increasing by 22.7% and Getty Images by 39.7% in pre-market trading. However, both companies have experienced a decline in stock value over the past four years, attributed largely to the growing ubiquity of smartphone photography.

Craig Peters, CEO of Getty Images, will head the newly combined entity, which is projected to generate nearly $2 billion in annual revenue. Peters expressed optimism about the merger's prospects, downplaying AI's disruptive potential and anticipating smooth regulatory approval in both the U.S. and Europe. "We don't control the timing of (the approval), but we have high confidence," Peters stated, emphasizing that the merger would enhance customer choice.

However, the landscape for antitrust reviews might be shifting.

With recent appointments by U.S. President-elect Donald Trump to the Department of Justice Antitrust Division, there's speculation about a more aggressive regulatory stance. John Newman, a law professor at the University of Miami, noted, "With Gail Slater at the helm, the antitrust division is going to be a lot more aggressive under this Trump administration than it was under the first one," as reported by Reuters.

Regulatory bodies are poised to scrutinize how this merger will affect both the traditional sales of images to established media outlets and the newer market of AI-driven, copyright-compliant image services.

The merger is expected to yield up to $200 million in cost savings within three years post-closure, with Getty investors controlling approximately 54.7% of the new company and Shutterstock shareholders the remaining 45.3%.

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