AppLovin Offers to Acquire Game Development Platform Unity for $17.54 Billion: Details

AppLovin's offer comes amid warnings of a slowdown in the sector as gamers pick outdoor activities due to inflation and easing of COVID-19 restrictions.

By Reuters | Updated: 9 August 2022 20:22 IST

Photo Credit: Unity

Unity's development platform is used to create popular games from Niantic and Activision

Highlights

AppLovin wants to acquire Unity in an all-stock deal
Unity was used to develop games like Call of Duty: Mobile, and Pokémon Go
Unity is said to be in talks to spin off its China unit

Gaming software company AppLovin on Tuesday made an offer to buy peer Unity Software in a $17.54 billion (roughly Rs. 1,39,600 crore) all-stock deal, looking to tap into growing demand for three-dimensional gaming. Both companies make software used to design video games. Game-making software has also been expanding to new technologies such as the so-called metaverse, or immersive virtual worlds.

Unity's software has been used to build some of the most-played games such as Call of Duty: Mobile, and Pokémon Go, while AppLovin provides helps developers to grow and monetize their apps.

The enterprise value of the deal is $20 billion (roughly Rs. 1,59,200 crore). AppLovin will offer $58.85 (roughly Rs. 4,700) for each Unity share, which represents a premium of 18 percent to Unity's Monday closing price.

Shares of Unity rose 7 percent, while those of AppLovin fell 14 percent before the opening bell.

Under the proposed deal, Unity will own 55 percent of the combined company's outstanding shares, representing about 49 percent of the voting rights.

AppLovin Chief Executive Officer Adam Foroughi said the combined company will have the potential to generate an adjusted operating profit of over $3 billion (roughly Rs. 23,900 crore) by the end of 2024.

"Unity is one of the world's leading platforms for helping creators turn their inspirations into real-time 3D content," Foroughi said.

Last week, Reuters reported that Unity was in talks to spin off its China unit to expand in one of the world's biggest markets for video games.

Palo Alto, California-based AppLovin, backed by KKR and Co went public last year, cashing in on the surge in demand for video games from people staying at home due to the COVID-19 pandemic.

AppLovin's offer, however, comes as game developers and console makers warn of a slowdown in the sector as decades-high inflation and easing of COVID-19 restrictions lead gamers to pick outdoor activities.

Is PS Plus better than Xbox Game Pass now? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.