The story cites no sources, and both Adobe and The Foundry have declined to comment. However, it's public that the Foundry is for sale by its owner - private equity firm Carlyle - and Adobe is, at first glance, a good fit for the role.
Adobe's Creative Cloud line of products dominate over others in widest part of the 'media and entertainment' markets - as software firms call our industries to differentiate them from tools to create real-world things likes products and architecture. Areas where others rule include 3D - where Autodesk is top dog, but The Foundry's own Modo competes - and, on a much smaller scale, high-end visual effects: where Nuke is the compositing software of choice.
Adobe has its own compositing software, After Effects, but this is a different beast. After Effects is an animation and motion graphics tool for a wide range of users at different skills levels - Nuke is for talented, focussed professional compositors only. After Effects is primarily based around a layered timeline, Nuke a node-based system - so working with Nuke is inherently more complex, but that makes it much more capable of creating much more complex effects. And AE is used by a relatively large number of firms around the world - Nuke by a few, primarily in VFX hubs like Soho.
Modo has no real rival within Creative Cloud - except perhaps the stripped down version of Maxon's Cinema 4D that's been built onto After Effects. Modo is better known as a product design tool than a Maya rival and it's interface is further away from Adobe's than Cinema 4D.
The Foundry also owns powerful-but-niche VFX workflow tools like Katana, painting tools like Mari and the recently-acquired Mischief - plus After Effects plug-ins like Keylight (which Adobe licences) and Kronos.
Why Adobe would want The Foundry
So - assuming the Telegraph's story is more than mere fancy - why would Adobe want applications that are more niche than its own, a 3D suite from a different market, some tools that overlap with its own and some plugins The obvious answers are for the technology and the PR.
Nuke has been the primary compositing tool for the best visual effects seen in Hollywood films, including all recent VFX Oscar nominees and winners. After Effects has likely been used on all of these too, but for much simpler work - and Adobe doesn't get the plaudits that The Foundry does for this. Owning the product used for create Oscar-winning visual effects on Gravity (top), is simpler to understand for those in businesses outside the creative industries - businesses Adobe is pushing towards with tools like Document Cloud.
More important is the tech. Adobe could reskin and reengineer Modo to build a 3D suite that looks and works like (and with) the rest of Creative Cloud much more easily than building its own.
There are many features and workflows within Nuke that could benefit After Effects. The Foundry's relentless pursuit of the needs of the best VFX houses in the world has lead to some truly groundbreaking creative tools. The benefits could flow both ways too. Adobe develops innovative technology of its own - and buys more in - and Nuke could benefit from the likes of the facial recognition and tracking tech it's adding to the next version of After Effects (perhaps more than AE itself could).
Why Nuke users will worry
If Adobe does buy The Foundry, Nuke users have a reason from history to be worried. Nuke supplanted the VFX industry's previous compositing software of choice - Shake, which was bought by Apple in 2002 to use Nothing Real's technology and developers to bolster Final Cut Pro and Motion. Apple stole Shake's best assets for is own tools and then left it to die.
Would Adobe do the same Perhaps not intentionally - having a tool dedicated to the highest ends of the visual effects industries is a source of both great PR and R&D, exactly what Adobe would be buying The Foundry for. However, this is ignoring the penguin in the room.
Most of the high-end VFX industry has standardised on Linux and Adobe doesn't really do Linux (at least for Creative Cloud's software tools). This was the industry's biggest problem with Shake's acquisition by Apple: its core users didn't want to move to change their IT platform, so moved to the increasingly popular Nuke. Business issues caused by developing Nuke on a platform that isn't used by Adobe's other tools could damage Nuke's long-term future on Linux - and by that its usefulness to VFX studios.
Adobe could try to coax the industry over to Windows to access the rest of its Creative Cloud tools - but those in charge of IT at the big VFX firms are fixed on Linux. Even the mooted 'transformation' of the industry moving from big workstations under desks to virtualised set-ups with thin clients on artists, modellers and animators' desks and the real power sitting in datacentres - helping deal with Soho's problems of lack of space and limited power - has been held back by the lack of support for Linux desktops by the main virtualisation software provides like VMware (though VMware released a Linux-support beta of its VMware Horizon desktop virtualisation software suite last month).
Unlike with Shake, there doesn't appear to be a natural successor to Nuke if it becomes a footnote in After Effect's development history. Blackmagic Fusion (ne Eyeon) is the nearest competitor and Blackmagic seems more interested in creating a Mac version than a Linux version (there used to be a Fusion for Linux, but that was just the Windows version running on a Linux-based emulator.
The Foundry and Nuke would be a great asset to Adobe and, specifically, After Effects users - but could do real damage to the VFX industry.