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Unity and ironSource’s merger moves ahead

The companies have moved closer to finalising the deal – and leaving AppLovin out in the cold
Unity and ironSource’s merger moves ahead
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Following an attempted acquisition by AppLovin, Unity is moving forward with its planned merger with ironSource.

This comes in the wake of Unity’s board of directors voting unanimously to disregard AppLovin’s offer, which would have seen the company’s shareholders maintaining a narrow majority in terms of votes in exchange for Unity CEO John Riccitiello becoming the CEO of the new entity.

Unity called for a meeting of the shareholders of both itself and ironSource at the end of last week, although no date has been set for the meeting.

The merger, first announced in mid-July, saw ironSource’s valuation increase to $4.4 billion – a 75 per cent premium above its average share price in the previous 30 days, but a 57 per cent decrease from the value when the company began trading in July 2021.

Is the battle really over?

Although the deal hasn’t been finalised, an SEC filing from August 26th shows that should either company back out, they would be required to pay termination fees of $150 million to the other. Up to $20 million in additional fees could be imposed if such a cancellation came as a result of one company’s shareholders failing to approve the deal.

However, such a failure seems like a slim possibility at this stage. The ongoing battle between AppLovin, Unity, and ironSource has seen Unity as the hot commodity, being the development platform of choice for around 70 per cent of mobile developers. ironSource is unlikely to back out of a deal that would see them join forces with Unity, while Unity have reaffirmed their commitment to the merger.

So where does this leave AppLovin? Well, it’s been theorized that the company’s acquisition offer of Unity was an attempt to maintain their own place in the industry. With ironSource now set to become more deeply integrated with Unity’s platform, it could greatly affect AppLovin’s market share – and its ability to compete.

This year, we listed AppLovin and Unity as two of the top 50 mobile game makers of 2022.