After Unity Software rejected the AppLovin proposal, the mobile technology company announced that it would not be submitting another proposal.
Mobile tech company AppLovin (NASDAQ: APP) is withdrawing from its effort to acquire Unity Software Inc after its initial bid was rejected. On Monday, AppLovin revealed that it is giving up on its acquisition effort to buy Unity Software after the software company’s shareholders rejected the $20 billion bid.
In August, the mobile technology company submitted an unsolicited proposal to purchase Unity. The proposal forces Unity Software to terminate its recent deal to merge with AppLovin competitor ironSource (NYSE: IS). According to AppLovin CEO Adam Foroughi, the union with Unity Software will birth leading businesses that will yield significant gains. In a statement, he gave a joint estimated run rate of more than $3 billion by the end of 2024. The proposal entails that Unity owns 55% of the merged companies’ shares which equals 49% voting rights. However, the software company’s agreement with ironSource is for the Israel-based company to become a wholly owned subsidiary of Unity.
However, Unity Software turned down AppLovin’s proposal on the grounds that it is committed to its relationship with ironSource. Unity President and CEO John Riccitiello explained that the Board is confident in the ironSource’s deal. The top executive said:
“The Board continues to believe the ironSource transaction is compelling and will deliver an opportunity to generate long-term value through the creation of a unique end-to-end platform that allows creators to develop, publish, run, monetize, and grow live games and real-time 3D content seamlessly. We remain committed to and enthusiastic about Unity’s agreement with ironSource and the substantial benefits it will create for our shareholders and Unity creators.”
AppLovin Gives Up on Unity Acquisition
After Unity Software rejected the AppLovin proposal, the mobile technology company announced that it would not be submitting another proposal. In addition to its decision not to submit a second proposal, the company is withdrawing from the initial one. AppLovin added that it is moving forward from the proposed deal with Unity and will focus on its platform expansion. The CEO stated:
“We remain excited about the long-term growth potential of our core markets and AppLovin, Our experienced and dedicated team will continue to focus on what we can control, including continual improvements to our products and technology and expanding into newer high-growth markets. Our team and culture have always emphasized and incentivized an entrepreneurial mindset in pursuit of long-term innovation and value creation. These core values will continue to drive our roadmap and focus across the company going forward.”
After its withdrawal from the proposed relationship with Unity Software, AppLovin stock has gained more than 3% in after-hours trading. Except for an 18.35% increase in the last five days, the company’s stock has recorded steady declines over the past year.