AppLovin wants to buy video game maker Unity for $20 billion – TechCrunch
A year after its IPO, app growth and monetization agency AppLovin has submitted an unsolicited ad proposal today to buy the Unity game engine in a deal worth $20 billion. But there’s a catch: Unity would have to terminate its recent agreement to merge with ironSource, a competitor of AppLovin.
Unity powers thousands of console games, but when it comes to mobile apps, Unity supports games like Pokémon Go, Animal Crossing: Pocket Camp, Call of Duty: Mobile and more. Unity CEO John Riccitiello said he was interested in the deal with ironSource because it would give Unity developers more tools to develop and monetize their apps, but the company has yet to respond. AppLovin’s offer, which would provide similar benefits to creators.
“We believe that together, AppLovin and Unity are creating a market-leading company that has tremendous growth potential,” Adam Foroughi, CEO of AppLovin, said in a press release. AppLovin estimates that together the companies could achieve an estimated run rate-adjusted EBITDA of more than $3 billion by the end of 2024. In AppLovin’s proposal, Unity would own 55% of the shares of the merged company, which represents 49% of the voting rights. But in the deal with ironSource, the Israel-based company would become a wholly owned subsidiary of Unity.
Today’s Unity news doesn’t end there, however. Reuters reports that Unity has reached a billion dollar deal to create a joint venture in China. Partners in the venture, which will be called Unity China, include tech giants like TikTok parent ByteDance, Alibaba and more. The deal will help Unity develop local versions of its products for game developers.
Amid falling tech valuations, M&A activity is becoming increasingly popular, and gaming is no exception. Microsoft is set to complete a $68.7 billion acquisition of games company Activision Blizzard next year, but the deal didn’t come without shareholder control.