No, because the acquisition makes AppLovin more valuable. If merging with Unity makes AppLovin $17.5B more valuable than it was previously, then the existing stock's value doesn't change.
Of course, the market may disagree on the value in either direction.
There's an added complication that some of the stock is class-C non-voting stock (which is less valuable) but they plan to make it voting stock at some stage after the transaction.
Also, Unity stock holders end up holding 55% of the merged company.
Of course, the market may disagree on the value in either direction.
Mergers are weird.