AppLovin submitted a $17.5 billion bid to acquire rival Unity Software, a tie up it explained was designed to create a market leading business for developers and provide a boost to the mobile gaming sector.

In a statement, AppLovin detailed it had offered $58.85 per share in Unity, a premium of 18 per cent on its closing price on 8 August, which would give it a 55 per cent stake in a proposed combined company and 49 per cent voting rights.

If the deal is accepted, AppLovin claimed it would create a business with “substantial revenue growth, cash flow and operational efficiencies that are well beyond each company’s potential standalone performance”.

Unity and AppLovin each create software for mobile gaming, with the former’s technology used for popular titles including Call of Duty Mobile and Pokemon Go.

AppLovin also provides services for developers to grow their platforms and generate revenue.

In an apparent push to get the deal accepted, AppLovin claimed its track record “as a leader” in growth and monetisation for app developers left it better positioned than any other company to develop an end-to-end platform with Unity.

It added it runs its software business at a high margin and there would be “substantial infrastructure savings and other efficiencies of scale for a combined business”.

Separately, Unity has already struck a deal to acquire smaller rival ironSource for $4.4 billion. AppLovin stated the deal would have to be terminated should its own bid proceed.

AppLovin further proposed Unity’s CEO John Riccitiello becomes the combined company’s CEO, while its chief Adam Foroughi is named COO.

Unity’s board is now evaluating the proposal.