- Electronic Arts (NASDAQ:EA) will go private in a record-breaking US$55 billion leveraged buyout, with investors including Silver Lake, Saudi Arabia’s Public Investment Fund (PIF), and Jared Kushner’s Affinity Partners.
- The deal would be the largest leveraged buyout ever, surpassing previous records, and could be announced within days, according to reports from WSJ, Reuters, and Financial Times.
- Saudi Arabia’s PIF already owns nearly 10 per cent of EA and has been expanding its gaming investments globally, including stakes in Nintendo (OTC Pink:NTDOF), Capcom (OTC Pink:CCOEF), and Take-Two (NASDAQ:TTWO)
- Electronic Arts stock (NASDAQ:EA) opened trading at US$203.50
Electronic Arts (NASDAQ:EA), the video game publisher behind global franchises like Madden NFL, The Sims, and Battlefield, is on the verge of being taken private in a landmark US$55 billion leveraged buyout. If finalized, the deal would mark the largest such transaction in history, surpassing the US$32 billion TXU buyout in 2007.
Announced officially on Monday morning, EA signed an agreement to be acquired by an investor consortium comprised of private equity firm Silver Lake, Saudi Arabia’s Public Investment Fund (PIF), and Affinity Partners, the investment firm founded by Jared Kushner. The all-cash transaction values EA at approximately US$55 billion. This news first came to us via reports from The Wall Street Journal, Reuters, and Financial Times.
Major shift and global implications
The move to take EA private comes amid a wave of consolidation in the gaming industry, with major players like Activision Blizzard and Zynga already absorbed by larger firms. Analysts say EA’s consistent cash flows and annualized sports titles make it an attractive acquisition target.
Saudi Arabia’s PIF, which already owns nearly 10 per cent of EA, has been aggressively expanding its footprint in gaming through its Savvy Games Group. The fund holds stakes in companies like Nintendo (OTC Pink:NTDOF), Capcom (OTC Pink:CCOEF), and Take-Two Interactive (NASDAQ:TTWO), and recently acquired Scopely for US$4.9 billion
The buyout aligns with Saudi Arabia’s Vision 2030 strategy to diversify its economy beyond oil, positioning gaming as a key pillar of its entertainment and cultural infrastructure.
Ethical concerns
The involvement of Jared Kushner’s Affinity Partners adds a layer of geopolitical complexity. The firm is backed primarily by Saudi funds, raising questions about foreign influence in American media and entertainment. Critics have also pointed to Saudi Arabia’s human rights record, including the 2018 assassination of journalist Jamal Khashoggi, as a source of concern.
Despite these concerns, industry insiders suggest that going private could offer EA more flexibility to invest in emerging technologies like AI-driven game development and mobile platforms, free from the pressures of quarterly earnings reports.
What’s next?
Sources claim JPMorgan Chase (NYSE:JPM) is working on a financing package for the buyout group. If successful, the deal would reshape the landscape of the gaming industry and further blur the lines between entertainment, politics, and global investment.
EA, Silver Lake, PIF, and Affinity Partners have not yet commented publicly on the reports.
It’s in the (political) game
With headquarters in Redwood City, California, and studios all over the world, Electronic Arts is a digital interactive entertainment company that develops, markets, publishes and delivers games, content and services that can be played by consumers on a range of platforms such as game consoles, personal computers, mobile phones, and tablets.
EA’s stock (NASDAQ:EA) surged 15 per cent on Friday following the news and opened Monday at a 52-week high of US$203.50 a share and pushing its market capitalization beyond US$50 billion. On average, the stock has risen 38.54 per cent since this year began.
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