AppLovin Walks Away from Unity Software Takeover Bid

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The rescinded offer clears a path for Unity Software to pursue a $4.4 billion purchase of AppLovin competitor ironSource Ltd.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.