Investing.com – Shares in Getty Images (NYSE: ) rose on Tuesday after it announced a merger with peers Shutterstock (NYSE: ) stock imaging titan worth about $3.7 billion is poised to tackle the challenges posed by the rise of artificial intelligence.
The move, which is still subject to shareholder approval and is expected to be reviewed by regulators, comes as the firm faces competition from the likes of AI-enhanced text-to-image platforms such as OpenAI's DALL-E.
Under the terms of the agreement, Shutterstock shareholders can choose to receive $28.84870 per share in cash or 13.67237 shares of Getty Images. They can choose a combination of 9.17 shares of Getty Images and $9.50 in cash for each share of Shutterstock they own.
Investors in Getty Images will own approximately 54.7% of the combined business, with the rest held by Shutterstock shareholders.
Craig Peters, the current CEO of Getty Images, will head the combined team once the transaction closes, the company said in a statement. The new entity will continue to trade on the New York Stock Exchange under the ticker symbol “GETY”, it added.
“With the rapidly increasing demand for compelling visual content across industries, there has never been a better time for our two industries to come together,” said Peters.
In particular, the companies said that the transaction will facilitate greater investment in “creating new content”, helping to increase coverage of the event, and building customer-facing technologies and capabilities “such as search, 3D images and AI production.” The deal is also expected to result in cost savings of between $150 million and $200 million annually in the third year after completion.
“By combining our complementary strengths, we can better address customer opportunities while delivering exceptional value to our partners, customers, and shareholders,” added Peters.
Getty Images' share price rose more than 31% in early US trading, while Shutterstock's share price also rose more than 22%.