AppLovin Walks Away from Unity Software Takeover Bid


Backing away from the deal, AppLovin said it thought that remaining independent is better for stockholders and other stakeholders.


Pavlo Gonchar/Zuma Press

AppLovin Corp.

APP 2.81%

has scrapped plans to acquire

Unity Software Inc.

U 2.45%

after the company opposed its $17.5 billion offer.

The mobile technology company said Monday that it wouldn’t submit another proposal to combine with Unity Software, in a deal that would have combined two large providers of tools for mobile developers.

AppLovin said that it saw potential in combining with Unity but that it now thinks that remaining independent is better for stockholders and other stakeholders. It will focus on gaining market share and expanding its platform.

The rescinded offer clears a path for Unity Software to pursue a $4.4 billion purchase of AppLovin competitor ironSource Ltd. AppLovin’s offer had called for the two companies to terminate the deal that was agreed upon in July.

Shares of AppLovin rose 2.2% to $29.14 in after-hours trading, while Unity Software shares fell 3% to $41.20. IronSource shares climbed 5% to $4.39.

Unity Software’s board opposed AppLovin’s deal last month, claiming that it wasn’t in the best interest of shareholders. Instead, they recommended shareholders vote in favor of the ironSource deal.

AppLovin’s unsolicited proposal valued Unity at $58.85 a share, or $17.5 billion total, based on the number of shares outstanding at the time, according to FactSet. The deal would have given Unity an enterprise value of $20 billion.

Under AppLovin’s proposal, Unity shareholders would have controlled 55% of the combined company and appointed a majority of the board but have only 49% of voting rights, according to the deal terms. The company would have been led by Unity Chief Executive

John Riccitiello,

and AppLovin CEO

Adam Foroughi

would have been chief operating officer.

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the September 13, 2022, print edition as ‘AppLovin Calls Off Unity Software Bid.’


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