$17.5 Billion for Unity; This Could be Industry's Second Largest Acquisition [UPDATED]
AppLovin wants to acquire Unity for $17.5 billion. If finalized, the deal would be the second largest acquisition in the video game industry.
Source: Unity for Games | Facebook.
- AppLovin has made an offer to buy Unity for $17.5 billion.
- Both companies develop software that is used by game developers.
- If finalized, it would be the second largest acquisition in the history of the gaming industry.
Update
The merger proposal from AppLovin was unanimously rejected by Unity's board of directors. The reason given was "incompatibility of the interests of Unity shareholders" with the purchase offer from AppLovin. Unity CEO John Riccitiello conveyed that talks would instead continue with ironSource in order to buy out the company. ironSource is a software developer that focuses on developing monetization and distribution technologies for mobile applications.
Original text
The company AppLovin has filed an offer to purchase the creators of a popular engine used to create games and interactive content, used in, among other things. Call of Duty: Mobile, Pokemon Go, or Cities Skylines, for $17.54 billion. AppLovin is a software company that helps mobile app developers with market analysis, monetization implementation and marketing. AppLovin has a track record of investing in mobile app development studios. Their Lios Studios supports the running of app developers' businesses.
A proposal has been made to buy Unity
As reported by Reuters, AppLovin has offered to buy every single Unity Technologies share for $58.85 (that's equivalent to Monday's share price with a bonus of 18%).
The offer stipulates Unity's ownership at 55% of the remaining shares. They, in turn, represent 49% of the company's voting rights. Unity said it will evaluate AppLovin's offer after the latest quarterly revenue report is released.
What will follow the purchase of Unity?
According to Reuters, last month Unity offered software developer ironSource to buy the company for $4.4 billion. However, the deal would have to be scrapped in the event of a positive response to AppLovin's offer.
In addition, there will be changes inside the companies if the agreement is accepted by both parties. Unity CEO John Riccitiello would become CEO of the combined companies. AppLovin CEO Adam Foroughi, meanwhile, would take on the role of chief operating officer.
AppLovin's current CEO said the consolidation with Unity would generate an operating profit of more than $3 billion by the end of 2024.
Both companies make software that is used by game developers. The Unity graphics engine would continue to be used to create such productions, while AppLovin would support creators in the development and monetization of their titles (especially those using virtual reality).
Recall that last month John Riccitiello criticized developers who limit themselves with monetization in their games. Riccitiello apologized for his words after the storm caused by his words.
Serkan Toto of Kantan Games assessed that a merger of the two companies would be surprising. The two companies are currently worth $15 billion.
AppLovin's purchase of Unity for $17.5 billion would be the second largest acquisition in the history of the video game industry. So far first place goes to Microsoft's acquisition of Activision Blizzard at a cost of $68.7 billion. Third was Take-Two Interactive's purchase of Zynga ($12.7 billion).
