Adobe Systems and Aldus Corp. will combine to create the fourth-largest personal computer software company in the U.S. Together, they had $520 million in 1993 revenue.
No new name has been selected, but Adobe President Chuck Geschke quipped: "It's quite possible the name of the company will start with the letter A."
Both companies market software for desktop publishing and graphics, products widely used in agency creative departments.
Adobe, which spent $3 million to $5 million on advertising last year, has Foote, Cone & Belding, Technology, San Francisco, as its agency of record; Creative Media handles media placement. Aldus, which spent $2.2 million on U.S. advertising, has no agency of record but uses Murphy Marketing Network, Oakland, Calif., for creative and other services. No agency changes are anticipated until the merger is completed, probably in July.
The companies cited the synergies of their products-drawing software Aldus Freehand and Adobe Illustrator are the only direct competitors-as a strength. Executives also said the merger will bolster marketing in Japan and Europe, where they see growth opportunities with combined marketing organizations.
Aldus founder and CEO Paul Brainerd, credited with coining the term "desktop publishing," said in August he wanted to move on and put the company up for sale.
The merger, which amounts to an acquisition of Aldus by Adobe, comes as the PC software industry retrenches amid price wars, falling profits and the emergence of a mass market of PC users.
"Whether authoring in print, video or new interactive media, the combined company will provide a nearly complete set of tools to satisfy those requirements," said Adobe CEO John Warnock.