A Getty Images Holdings closed the details for the purchase of the competitor Shutterstockin a deal that will create a combined company valued at about $3.7 billion, including debt.
Getty Images is offering to pay about $28.85 in cash, or approximately 13.67 Getty Images shares for each Shutterstock share, according to a statement released Tuesday, confirming an earlier report from Getty Images. Bloomberg News.
Shutterstock shareholders will also be able to choose to receive a payment with a mix of cash and Getty shares. For the transaction, Getty Images is expected to pay $331 million in cash and 319.4 million of its shares.
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Upon completion, Getty Images holders will own approximately 54.7% of the combined company, while Shutterstock shareholders will own the remainder.
Craig Peters, CEO of Getty Images, will hold the same role at the combined entity.
The agreement brings together two of the largest providers of licensed visual content in the US, at a time when artificial intelligence is transforming the content creation market and cell phone cameras are diluting the value of stock photos.
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The new company will combine Getty Images’ massive library of photos, illustrations and videos with Shutterstock’s massive searchable platform, which allows contributors to submit their content.
As of Monday’s close, Getty Images — which has about $1.4 billion in debt — had lost about 73% of its market value since going public in July 2022 through a blank check agreement. Shutterstock fell about 50% in the same period.
Following Tuesday’s announcement, Shutterstock’s shares rose as much as 44% in premarket trading, while Getty’s shares soared as much as 100%. The companies believe that by coming together they will be able to cut costs and increase profitability by offering a broader set of services to the media, advertising and content creation industries.
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Antitrust Risk
The tie-up will also be an early test of how receptive Donald Trump administration’s antitrust watchdogs will be to mergers between major players in relatively concentrated industries, after Joe Biden’s administration blocked high-profile deals in the grocery and aviation industries. .
While this transaction will likely draw intense scrutiny, it underscores how optimistic dealmakers are that regulators will take a more lenient approach — at least in certain sectors.
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Seattle-based Getty Images was co-founded in 1995 by Chairman Mark Getty of the wealthy Getty family. He is a director of Getty Investments, which owns about 43% of the company’s outstanding shares, according to data compiled by Bloomberg.
Over the decades, the company has been in and out of the public markets and changed hands a few times. Hellman & Friedman took it private in 2008 and sold it four years later to Carlyle Group Inc. The Getty family took control of the company in 2018 and sold a minority stake that year to the investment arm of Koch Industries Inc.
The family agreed in 2021 to merge the company with a blank check vehicle backed by CC Capital and Neuberger Berman. Berenson & Co. and JPMorgan Chase & Co. are financial advisors to Getty Images, while Allen & Co. are financial advisors to Shutterstock.
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