Another huge gaming acquisition is on the horizon. Mobile app marketing platform AppLovin has made an offer to buy Unity in a $17.54 billion deal.

  • Reuters reported the news on August 9, saying that AppLovin sees this deal as an opportunity to “tap into growing demand for three-dimensional gaming.”
  • The all-stock deal implies that AppLovin will pay $58.85 for each Unity share, which is up 18% from the game engine developer’s closing price on Monday.
  • If Unity accepts the offer, it will own 55% of the combined company’s issued shares. It represents around 49% of the voting rights.
  • The deal must be approved by each company’s board of directors. On top of that, Unity’s proposed merger with ironSource will be terminated.
  • According to AppLovin CEO Adam Foroughi, the combined company will reach an adjusted operating profit of over $3 billion by the end of 2024.
  • This is a bold forecast, considering the slowdown and expected recession in the gaming sector and the fact that Unity recently reported a loss of $171 million (up 54.3% compared to the loss for the first quarter of 2021).

Market analyst Eric Seufert also shared his thoughts on why AppLovin decided to acquire Unity. He noted that the release of Apple’s AppTrackingTransparency framework accelerated consolidation on the demand side.

Unity also laid off hundreds of employees in June and announced a merger with ironSource last month. The latter caused controversy online, with game developers recalling ironSource’s malware scandal and threatening to boycott Unity after CEO John Riccitiello called some devs “f***ing idiots.”