The enterprise value of the deal is $20 billion. AppLovin will offer $58.85 for each Unity share, the companies said, which represents a premium of 18% to Unity's Monday closing price.
Under the proposed deal, Unity will own 55% of the combined company's outstanding shares, representing about 49% of the voting rights.
Shares of Unity rose 7%, while those of AppLovin fell 14% before the opening bell.
(Reporting by Eva Mathews in Bengaluru; Editing by Saumyadeb Chakrabarty)
