Sep 13, 2022 - Economy

AppLovin won't sweeten $20 billion bid for Unity

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Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images.

AppLovin on Tuesday said it won't submit a new bid to acquire video game development platform Unity Software, after its $20 billion all-stock offer was rejected.

Why it matters: Unity now can complete its $4.4 billion acquisition of mobile ad tech firm IronSource, which it would have needed to scrap under the terms of AppLovin's proposal.

  • Existing Unity shareholders Silver Lake and Sequoia will buy a combined $1 billion of Unity convertible notes when the IronSource merger closes.

The bottom line: Going with the smaller deal lets Unity provide mobile developers with more monetization tools, without having ad tech dominate company revenue. It also gets to maintain control, whereas the AppLovin deal would have given Unity a 55% stake in the combined company but only 49% of voting rights.

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