Unity is currently valued around 15B. 17.5B is an embarrassingly small premium, especially considering how down the tech broader tech market is. You have to think Unity will shortly be worth more than 17.5B.
This is a really crap deal for shareholders. They'll go from owning a $15bn company, to owning half of a ~$30bn company, but with all the risk of the merger failing or failing to live up to promises, which, surprise surprise, is the norm.
They are making a big push into their game services division, which is more than ads now: matchmaking, lobbies, dedicated servers (Multiplay acquisition), etc. They also aren't trying to only target Unity for some of these. Multiplay in particular runs a lot of Unreal games, or at least they did (such as Apex Legends).
Unfortunately I don't see a world where these services move the needle at all for a giant behemoth of a company like Unity.
They barely get more than a billion/year in revenue while burning over half that amount. Paying nearly $20B for that is a huge leap of faith with regards to their future potential and hardly a sure thing. The stock market valuing them at that price during a period of zero interest rate with blinders on for risk is not really a valid stamp of proper value. The fact they agreed to sell at that price to a malware company might indicate as such too.
If it's a disappointment, the company could easily be worth a couple billion less tomorrow morning. And then AppLovin's deal might sound more interesting to Unity's shareholders. That's probably why AppLovin timed this announcement like this.