Macromedia bought for $3.4 billion

has announced a definitive agreement to acquire

in an all-stock transaction valued at approximately $3.4 billion.

"Customers are calling for integrated software solutions that enable them to create, manage and deliver a wide range of compelling content and applications - from documents and images to audio and video," said Bruce Chizen, CEO of Adobe.

He added: "By combining our powerful development, authoring and collaboration software - along with the complementary functionality of PDF and Flash - Adobe has the opportunity to bring this vision to life."

Under the terms of the agreement, which has been approved by both boards of directors, Macromedia stockholders will receive, at a fixed exchange ratio, 0.69 shares of Adobe common stock for every share of Macromedia common stock in a tax-free exchange.

Based on Adobe's and Macromedia's closing prices on Friday, April 15, 2005, this represents a price of $41.86 per share of Macromedia common stock. On the close of the transaction, Macromedia stockholders will own approximately 18 percent of the combined company on a pro forma basis.

The acquisition, which is expected to close in the autumn, is subject to customary closing conditions, including approval by the stockholders of both companies and regulatory approvals.