Taptica shareholders would hold a slightly larger stake in the combined company, Sky news reported.
The merged london-listed duo will operate under the Taptica name and be run by Ofer Druker, currently head of Taptica's U.S. division, a source told Sky News.
Taptica and RhythmOne did not immediately respond to requests for comment.
(Reporting by Ishita Chigilli Palli in Bengaluru; Editing by David Goodman)