Gaming software company Applovin Corp made an offer to buy larger sector peer Unity Software, also a video gaming software development company.
The deal is believed to be in the region of US$17bn, with AppLovin offering US$58.85 for each share in Unity, an 18% premium to its Monday closing price.
Unity’s software has been used to build Call of Duty: Mobile and Pokemon Go, while AppLoving helps developers grow and monetize their own apps.
According to Reuter, Unity will own 55% of the combined company’s outstanding shares, representing about 49% of the total voting rights.
The proposed deal will put Unity’s attempted takeover of ironSource, a smaller competitor, in doubt.
Unity said it would but IronSoruce in a US$4.4bn all-stock transaction last month but would be forced to terminate the deal should it wish to pursue a combination with AppLovin.
Under the proposed deal, Unity’s chief executive, John Riccitiello, would become chief executive of the combined business, while AppLoving chief executive Adam Foroughi will become chief operating officer.