Video game publisher Electronic Arts (EA) is set to be taken private in a landmark $55 billion deal, the largest leveraged buyout in history. The company, known for blockbuster franchises such as FIFA, Madden NFL, and The Sims, has agreed to a takeover bid from a consortium of investors. The deal, which values each EA share at $210, will see the company end its 36-year run on the public stock market.
The investor group is led by US private equity firm Silver Lake Partners, but also includes Saudi Arabia’s Public Investment Fund (PIF) and Affinity Partners, the firm founded by Jared Kushner, former White House senior advisor and President Trump’s son-in-law. PIF, which was already one of EA’s largest shareholders, will roll over its existing 9.9% stake in the company.
The deal, which surpasses the previous record for a leveraged buyout set by the 2007 privatization of Texas utility TXU, is a significant moment for the gaming industry. It reflects the immense value and cultural importance of video games, which have grown from a niche hobby into a multi-billion dollar business.
The decision to go private is a strategic one for EA. While its games maintain a loyal following, the company’s annual revenues have been stagnant over the past three fiscal years. Moving away from the scrutiny of quarterly earnings reports will allow EA to retool its operations and focus on long-term growth opportunities without the pressure of public markets.
Analysts believe the privatization could enable EA to take bigger creative risks and invest more heavily in new intellectual property and technologies. This newfound flexibility could be crucial in a fiercely competitive market, where rivals like Microsoft, which acquired Activision Blizzard in a deal worth nearly $69 billion in 2023, have been aggressively consolidating their position.
The deal is not without its controversies. The involvement of Saudi Arabia’s PIF and Jared Kushner’s Affinity Partners has raised questions from some corners, particularly concerning human rights. Human rights organizations have previously criticized the PIF, alleging that it has benefited from rights abuses. Additionally, some gamers have voiced concerns about the future of franchises like The Sims, given Saudi Arabia’s stance on minority rights and its laws against same-sex relationships.
The transaction is subject to approval from national security regulators in the US due to the Saudi involvement. However, with the backing of a firm led by the President’s son-in-law, many expect the deal to go through. The acquisition is expected to close in the first quarter of fiscal 2027, with current EA CEO Andrew Wilson remaining at the helm.
