Unity is the subject of a new $20 billion merger offer

Last month, the Unreal Engine competitor announced its planned merger with ironSource, a Tel Aviv company specializing in application monetization solutions. At the end of this transaction, which values ​​ironSource at 4.4 billion dollars, Unity will hold 73.5% of the merged company. The transaction has already been approved by the boards of directors of both companies and is only subject to the green light of shareholders and competition regulators.

However, a major troublemaker has just entered the scene in the person of the company AppLovin. Competitor of ironSource, this monetization and mobile marketing specialist has presented a merger offer valuing Unity at $20 billion at $58.85 per share, a very attractive price compared to its current valuation ($15 billion). The merger of Unity and AppLovin is projected to create a company with annual revenue of $7 billion and annual pre-tax profit of $3 billion by fiscal year 2024.

“Combining these two platforms would achieve optimal shareholder value and create an unprecedented end-to-end solution for developers to create, monetize, measure and grow games.“, affirms AppLovin, whose proposal will however only be valid in the event of the cancellation of the combination between Unity and ironSource. Under the terms of the offer, the shareholders of Unity would receive approximately 55% of the shares of the combined company and 49% of its voting rights.A fundamental detail, the merger proposed by AppLovin would maintain John Riccitiello as CEO of the new structure, while current CEO of AppLovin, Adam Foroughi, would be satisfied with a position of director of the operation.

“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. With AppLovin and Unity working together, developers will be able to seamlessly take their app from concept to market, with continued growth and optimization, to much greater scale and efficiency, enabling increase the growth of the entire mobile application industry and beyond“, estimates the statement of AppLovin.

Remember that despite a growing turnover, 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 footing with another loss of $177.5 million in the first quarter alone. AppLovin’s offer comes as Reuters tells us of the creation of Unity China, a joint venture formed by Unity’s Chinese subsidiary and a number of local partners including Alibaba and ByteDance. Unity entered 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.

• Also Read | Unity to merge with monetization specialist ironSource