Battlefield and Madden NFL developer agrees to sell itself in a deal that would be the largest leveraged buyout in history.
Saudi Arabia’s sovereign wealth fund, an investment company run by the son-in-law of the United States president, and a California-based private equity firm have bought gaming industry giant Electronic Arts (EA) in the largest leveraged buyout in history worth $55bn.
Public Investment Fund (PIF), the $1 trillion Saudi venture that is increasingly buying stakes in the global entertainment industry, formed a consortium with Jared Kushner’s Affinity Partners and technology and media-focused investment firm, Silver Lake.
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They reached a deal to pay EA shareholders $210 per share in cash, a 25 percent premium over the stock price of the company before rumours of the deal circulated last week, and even a premium over the all-time high stock price of more than $179 in mid-August.
EA’s shares jumped by 15 percent on the initial rumours, and have risen at least another 5 percent since the deal was confirmed on Monday, to trade at more than $200 per share on Tuesday. The deal takes the company private and is expected to close by the first quarter of the fiscal year 2027, meaning roughly the spring or summer of 2026.
By the deal’s close, EA’s 36-year run as a publicly traded company will come to an end. It will no longer have to issue public quarterly reports, and its stock will be delisted from the NASDAQ.
The deal is to be financed by approximately $36bn in equity from the three sponsors, including a 9 percent stake in the company that was already held by the Saudi wealth fund and is rolled in.
A history-making $20bn is to be provided by JPMorgan Chase in debt financing underwritten by the banking giant, about $18bn of which will fund the deal’s closing.
EA said in a statement that its board of directors approved the transaction. The deal still need to receive approval from stakeholders, as well as regulatory authorities.
The stakeholders are unlikely to turn down the transaction due to the significant cash profits it will deliver, and the deal is not believed to be facing antitrust issues, unlike Microsoft’s acquisition of Activision Blizzard, as it is not a merger of direct competitors but a financial transfer of ownership.
“I’ve admired their ability to create iconic, lasting experiences, and as someone who grew up playing their games - and now enjoys them with his kids – I couldn’t be more excited about what’s ahead,” Kushner, who cultivated close ties with Arab leaders during his time at the White House, said about EA in a statement after the deal.
EA makes huge game franchises like Battlefield, Sports FC football games, and Madden NFL, and owns studios like Bioware and Maxis that have made giant award-winning series, including Mass Effect and The Sims, respectively.
For now, the company is to proceed with the same structure and schedule, with CEO Andrew Wilson remaining at the helm.
Initial reactions from the gaming community have been mostly negative, with a number of journalists, streamers, developers and users online expressing a mix of shock and dismay about the huge effects of the business decision on the rising gaming industry.
