Getty Images Holdings, Inc (GETY) saw its stock plunge 5.33% in after-hours trading on Tuesday, following the announcement of a $3.7 billion merger with rival Shutterstock (SSTK). While both companies' shares initially soared on the news, concerns emerged over potential antitrust scrutiny given the combined entity's significant market share in the visual content licensing industry.

The merger, set to create a visual content powerhouse under the Getty Images name, is structured as a merger of equals. Getty shareholders will own approximately 55% of the combined company, with Shutterstock shareholders owning the remaining 45%. The deal is expected to generate significant cost savings, but it also highlights the "fast-evolving and highly competitive environment" driven by advancements in generative AI.

Despite the potential synergies and cost-saving opportunities, investors appear wary of the potential regulatory hurdles the deal may face. The Biden administration has taken a tough stance on antitrust issues, and the merger's announcement comes as the presidency is set to change hands, adding uncertainty to the regulatory landscape.