Unity rejects AppLovin's takeover bid, to go ahead with ironSource buyout

Gaming software maker Unity Software Inc on Monday rejected AppLovin Corp's $17.54 billion takeover offer and said it would go ahead with its planned purchase of ironSource. AppLovin, which competes with ironSource in helping developers grow and monetize their apps, offered to buy Unity in an all-stock deal last week on condition that it drop a $4.4 billion bid for the Tel Aviv-based company.

Gaming software maker Unity Software Inc on Monday rejected AppLovin Corp's $17.54 billion takeover offer and said it would go ahead with its planned purchase of ironSource.

AppLovin, which competes with ironSource in helping developers grow and monetize their apps, offered to buy Unity in an all-stock deal last week on condition that it drop a $4.4 billion bid for the Tel Aviv-based company. Shares of Unity, whose platform has been used to build some of the most-played games such as "Call of Duty: Mobile" and "Pokemon Go", were down about 3% in early trading, while those of ironSource surged about 17%.

Unity said on Monday AppLovin's offer was not in the best interest of shareholders and "would not reasonably be expected to result in a 'Superior Proposal' as defined in Unity's merger agreement with ironSource". "The Board continues to believe that the ironSource transaction is compelling and will deliver an opportunity to generate long-term value," Unity's Chief Executive Officer John Riccitiello said in a statement.

IronSource said it was committed to completing the deal with Unity as it would create "superior value for shareholders, customers, and employees". Both, Unity and ironSource are expecting the deal to close in the fourth quarter of the year.

AppLovin was not immediately available for comment.

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