Getty Images To Merge With Shutterstock and Create $3.7B Company as AI Threatens Stock Photo Industry

In a move sure to attract investor attention and make headlines throughout the entire process, stock photo titans Getty Images and Shutterstock are set to merge and create a visual content company with a value of approximately $3.7 billion, according to a Getty Images press release.

“Today’s announcement is exciting and transformational for our companies, unlocking multiple opportunities to strengthen our financial foundation and invest in the future — including enhancing our content offerings, expanding event coverage, and delivering new technologies to better serve our customers,” said Craig Peters, CEO of Getty Images.

Shutterstock CEO Paul Hennessy was equally enthusiastic about the prospects of the merger.

“We are excited by the opportunities we see to expand our creative content library and enhance our product offering to meet diverse customer needs,” said Hennessy.

“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. We look forward to working closely with the Getty Images management team to complete the transaction and drive the next chapter of growth,” he added.

The proposed company resulting from the merger would be called Getty Images Holdings, Inc., and would trade on the New York Stock Exchange under GETY.

According to the press release, both companies expect annual cost savings to the tune of $150 million to $200 million by year three as a result of the merger.

Getty Images, Shutterstock Facing Pressure From Generative AI Models Such as Midjourney, DALL-E

One factor that may have spurred the planned merger? The rise of generative AI models capable of spinning off a variety of images on the fly for editorial or commercial use.

As Reuters reported, tools such as Midjourney and DALL-E, among others, threaten the supremacy of stock photography sites. The ability for users to instantly conjure high-quality images from a simple prompt represents a fundamental sea change in terms of access to images destined for commercial or editorial use.

Further, other competitors in the traditional sense — ranging from free services like Unsplash or Pexels to paid alternatives like Canva or Depositphotos — also represent a continued challenge to Getty and Shutterstock.

Underscoring this point, the press release read: “The stronger financial profile of the combined company is expected to create increased capacity for product investment and innovation for customers in a fast‑evolving and highly competitive environment.”

Getty Images, Shutterstock See Stock Prices Surge After Merger Deal Announced

Per Investors Business Daily (IBD), investors seemed very bullish over the prospect of the planned merger. Getty saw its stock price surge by 24% in afternoon trading on Jan. 7, and Shutterstock stock also soared by 20%.

If the deal does reach its assumed conclusion, Shutterstock shareholders will receive $28.85 per share, in cash, for stock they own. As an alternative option, Shutterstock shareholders may elect to receive GETY stock instead, or a combination of cash and stock.

And while Reuters suggested that such a large merger in the stock photography space may trigger antitrust action from federal agencies, IBD gestured toward an incoming administration led by President-elect Donald Trump — one perceived as being more friendly on that score.