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AppLovin makes $17.5 billion bid to buy rival Unity Software

Video game software company AppLovin has made a bid to buy rival Unity Software for $17.54 billion in stock, threatening to derail Unity’s announced plan to acquire AppLovin’s smaller competitor, ironSource.

Both companies, AppLovin and Unity, produce software used for video game design. Such products are also advancing on new technologies such as metaverse.

Unity’s software has been used to create some of the most popular games, such as “Call of Duty: Mobile” and “Pokemon Go”, while AppLovin provides advice to developers to monetize and expand their apps.

AppLovin offered $58.85 for each share of Unity, which represents an 18% premium over Unity’s closing price on Monday.

Unity will own 55% of the outstanding shares of the combined company, representing approximately 49% of the voting rights.

AppLovin made the offer after Unity last month announced its purchase of ironSource in a $4.4 billion equity transaction.

Unity’s board will have discussions with ironSource if it wants to pursue a combination with AppLovin, according to the proposal.

Under the proposed deal, Unity Chief Executive John Riccitiello will become chief executive of the combined business, while AppLovin Chief Executive Adam Foroughi will assume the role of chief operating officer.

Unity said its board of directors will evaluate the offer. The company reported $297 million in quarterly revenue on Tuesday, growing 9% year-over-year as its operating loss increased.

“The proposed price for Unity appears well below its intrinsic value,” wrote Michael Pachter, an analyst at Wedbush Securities.

“We think that interference in the ironSource acquisition is problematic and will cause the Unity board to act very carefully before agreeing to an outright sale.”

Source: CNN Brasil

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