Unity is the subject of a new $17.5 billion merger bid

Last month, the Unreal Engine competitor announced its proposed merger with ironSource, a Tel Aviv-based company specializing in application monetization solutions. At the end of this transaction, which values ironSource at $4.4 billion, Unity will own 73.5% of the combined company. The transaction has already been approved by the boards of directors of both companies and is subject to the approval of shareholders and competition authorities.

However, with the company AppLovin, a major troublemaker has just entered the scene. ironSource’s competitor, the monetization and mobile marketing specialist, has submitted an offer to merge with Unity for the sum of $17.5 billion ($58.85 per share), which compared to its actual valuation ($15 billion) is an advantageous price. The merger of Unity and AppLovin is expected to create a company with annual sales of $7 billion and annual pre-tax income of $3 billion by fiscal 2024.

“The combination of these two platforms would deliver optimal shareholder value and create an unprecedented comprehensive solution for developers to build, monetize, measure and grow games.” affirms AppLovin, whose proposal will only be valid in the event of the termination of the merger between Unity and ironSource. Under the terms of the offer, Unity shareholders would receive approximately 55% of the combined company’s stock and 49% of its voting rights. A key detail, AppLovin’s proposed merger would retain John Riccitiello as CEO of the new structure, while AppLovin’s current boss, Adam Foroughi, would be content with a post as director of exploitation.

“Given AppLovin’s track record as a leader in growth and monetization for app developers, the company believes it is better positioned than any other company to build an end-to-end platform with Unity. Through the collaboration of AppLovin and Unity, developers will be able to take their app seamlessly from concept to launch, with continuous growth and optimization, to much greater scale and efficiency, enabling the growth of the entire mobile app industry and beyond can be increased” estimates the press release from AppLovin.

Remember that despite growing sales, Unity is still waiting to find the right formula. After losing $282.3 million in 2020 and $532.6 million in 2021, Unity started 2022 on a similar basis with another loss of $177.5 million in the first quarter alone. AppLovin’s offer comes as Reuters reports the formation of Unity China, a joint venture formed by Unity’s Chinese subsidiary and a number of local partners including Alibaba and ByteDance. Unity came to China in 2012 and today powers some very popular Chinese games like Genshin Impact, Pokémon Unite, Call of Duty Mobile, Naraka Bladepoint but also Honor of Kings.