Adobe Systems, the software developer, has finalised its acquisition of Macromedia, the online media specialist, in a deal Adobe says will place it as the sole serious rival to Microsoft in the digital document market.

Macromedia shareholders will receive 1.38 shares of Adobe stock for each of their common shares when the deal closes. Based on Friday’s closing price, the deal was valued at around $3.7 billion (£2.1bn).

The deal allows Adobe, which is best know for its Acrobat document applications, to move into online interactive media and the growing market for content designed for mobile phones. Macromedia is best known for its Flash software, which powers the animated graphics found on millions of web pages, and accounts for around 30 per cent of the interactive web-design market.

The acquisition also sets the stage for a show-down between Adobe and Microsoft for control of the world's secure documents.

Pierre Van Beneden, Adobe's Vice President for Europe, the Middle East and Africa, told Times Online: "The combination of 600 million Adobe Acrobat users with the users of Flash mean we have an entry platform which is a unique competitor to Microsoft."

"Our Acrobat reader is more widely deployed than Microsoft's offering. Microsoft's traditional strength has been its install base and not its marketing. So we'll see what happens."

Microsoft is working on a potential rival to Adobe's Acrobat system, under the codename "Metro". The technology will be designed to work across platforms, so that, for example, the same document could be viewed on a PC and a mobile phone.

Similarly, in April, Adobe said it aimed through the tie-up with Macromedia to produce "an industry-defining technology platform" - which would also work across platforms - through the combination of its Acrobat document software and Macromedia’s flagship Flash platform.

Mr Van Beneden said that industries where the secure circulation of documents is essential would remain Adobe's most important market.

"Highly regulated markets, such as banking, insurance - or governments - are badly in need of our technology," he said.

Shares of Adobe and Macromedia both climbed to 2005 highs in New York on Friday after the companies said they cleared the final regulatory hurdles for the pending merger.

Mr Van Beneden said Adobe has said it would detail the fiscal 2006 financial outlook for the combination with Macromedia when it reports its quarterly results on December 15.

Adobe climbed 3.2 per cent, to close at $34.97 while Macromedia climbed 3.8 per cent, to finish at $48.26 at the end of last week's trading in New York.

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