In a press release dated August 15, the Board of Directors of Unity unanimously felt that it ” is not in the best interests of shareholders » to accept AppLovin’s $17.5 billion takeover bid, submitted less than a week earlier. They consider that this proposal is not ” superior to the possibility of acquiring AppLovin’s less powerful competitor ironSource.
ironSource or AppLovin, two consistent options for Unity
Despite a complicated second quarter of 2022, Unity, owner of the eponymous game engine, has begun to prepare the takeover of ironSource for 4.4 billion dollars. The Israeli company specializes in the monetization of mobile applications.
A logical diversification path for Unity, whose platform has helped develop successes such as Pokemon Go, Animal Crossing or Call of Duty : Mobile. With the know-how of ironSource, Unity will be able to create a single end-to-end platform that enables creators to seamlessly develop, publish, run, monetize and grow live games and real-time 3D content », plead its CEO John Riccitiello.
It is in this context that AppLovin formulated its offer. Competitor of ironSource, AppLovin proposed to the shareholders of Unity a control of 55% of the titles of the new company, the possibility of appointing the majority of the Board of directors, but with 49% of the voting rights. John Riccitiello would have taken the helm of the company and Adam Foroughi, CEO of AppLovin, would have become chief operating officer.
Shareholders to decide
Important point of this proposal, Unity should have abandoned the acquisition of ironSource. As with the latter, the activities of AppLovin and Unity are very complementary. However the Wall Street Journal recalls that the developer of the game engine would have been forced to pay an indemnity of 150 million dollars to ironSource in the event of abandonment of the transaction.
John Riccitiello reported that ” The board continues to believe that the ironSource transaction is compelling and will provide an opportunity to generate long-term value “. He reiterated his commitment and enthusiasm ” on the agreement between Unity and ironSource and the substantial benefits it will create for our shareholders and the creators of Unity “. ironSource to renew its commitment to a buyout by Unity. It is now up to the shareholders to follow, or not, the direction indicated by its Board of Directors.