REDWOOD CITY, CA — Electronic Arts (EA), a video gaming giant, has agreed to be bought by a group of investors for an estimated $55 billion. This could be the largest private equity acquisition ever. A strong group is leading the all-cash deal, which would take the company private after 36 years on the public market. The group includes Saudi Arabia’s Public Investment Fund (PIF), private equity firm Silver Lake Partners, and Affinity Partners, the company Jared Kushner, U.S. President Donald Trump’s son-in-law, started.
The deal that is being proposed would pay stockholders $210 per share. It would be the most leveraged buyout ever, breaking the existing record of $32 billion for the purchase of Texas utility TXU in 2007. The group wants to finish the purchase by the end of the first quarter of 2027.
Why EA is a Good Company to Buy
Analysts say that EA’s great brand recognition and impressive catalog of games make it a good candidate for a takeover. The firm owns some of the most famous video game series in the world, like Madden NFL, Battlefield, The Sims, EA Sports FC, and Apex Legends. The purchase comes at a time when the gaming business is becoming more consolidated. For example, Microsoft bought Activision Blizzard, a competitor, for around $69 billion in 2023.
Possible Benefits and Drawbacks of Going Private
Experts say that going private may offer EA greater freedom to run its business because it wouldn’t have to worry about public markets and quarterly financial reports all the time. Some analysts call this “breathing room.” It might let the company change its strategy and focus on long-term growth and innovation, which could lead to “more or better games.”
But the accord also makes people worry. People in the gaming world have recently criticized EA for its aggressive ways of making money, such as live-service models and microtransactions. Some people think that the inflow of private wealth would make it less necessary to have these kinds of revenue streams, but the new owners have not said they want to change them.
Also, it is said that a lot of the deal, perhaps $20 billion, is being paid for with debt. Some people in the sector are worried about this because they think the new owners could have to cut costs, which could mean layoffs. EA has already laid off a lot of people recently. In 2024, it cut its employment by 5%, and then in May, it let off several hundred more people, bringing its total number of employees to 14,500.
Saudi Arabia’s Growing Gaming Presence
The proposed purchase is the most recent in a string of big investments by Saudi Arabia’s PIF in the global gaming business. The firm already owns 9.9% of EA and is a small stakeholder in Nintendo, a huge game company. Experts say that the plan fits with Saudi Arabia’s larger economic ambitions, taking advantage of the fact that most of its people are under 30. This change in demographics is causing a lot of people to want digital entertainment. The investments also come with a lot of criticism. Human rights groups have said that Saudi Arabia is “sportswashing” to make its image better around the world by making big investments in sports and entertainment.
Shareholders and regulatory bodies still need to approve the acquisition. Baird Equity Research analysts have said that the consortium’s “connections to both the Saudi government and the Trump administration” might be a “strategic asset for EA in navigating any regulatory speed bumps.”