Getty Images and Shutterstock will merge to create a giant company focused on photos and other visual content in a deal valued at $3.7 billion, the two firms announced on Tuesday.
The companies — whose tie-up comes as photographs and other still images are facing a surge of fresh competition from images created by artificial intelligence — said Tuesday that they have complementary portfolios and that a merger will provide customers with a broader array still imagery, video, music, 3D and other media.
Getty and Shutterstock will enter into a merger of equals — meaning that each firm comes into the agreement with roughly the same market capitalization and operational scope to form a new, combined entity.
“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,” Getty Images CEO Craig Peters said in a prepared statement.
Getty Images shareholders will own about 54.7% of the combined company at closing and Shutterstock stockholders will own approximately 45.3%.
The merged company, which will be led by Peters, will continue trading on the New York Stock Exchange under the ticker symbol “GETY.”
News of the merger sent Getty stock surging by nearly 60% in pre-market trading on Tuesday. The stock was selling at $2.57 a share at the close of trading on Monday.
Shares of Shutterstock were up by around 30% before the market opened on Tuesday.
The two companies will combine their content libraries so as to “enhance our product offering to meet diverse customer needs,” Shutterstock CEO Paul Hennessy said in a statement.
“We expect the merger to produce value for the customers and stockholders of both companies by capitalizing on attractive growth opportunities to drive combined revenues, accelerating product innovation, realizing significant cost synergies and improving cash flow,” he said.
Shutterstock shareholders can choose to receive either approximately $28.85 per share in cash for each share of Shutterstock common stock they own; about 13.67 shares of Getty Images common stock for each share of Shutterstock common stock they own; or a mixed consideration of 9.17 shares of Getty Images common stock plus $9.50 in cash for each share of Shutterstock common stock they own.
Its board will have 11 members, comprised of Peters, six directors designated by Getty Images and four directors designated by Shutterstock, including Hennessy. The chairman will be Mark Getty, current chairman of Seattle-based Getty Images.
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