EA to become a private company following $55 billion buyout
EA to be bought out by a consortium that includes Saudi Arabia’s Public Investment Fund (PIF)
EA has announced that it has reached a deal that will turn the publisher into a private company. The deal will acquire the company from its shareholders for $55 billion, with ownership being taken up by “The Consortium”, a group comprising PIF, Silver Lake, and Affinity Partners. This deal will be funded through approximately $36 billion in investment and $20 billion in debt.
This agreement will see “The Consortium” become 100% owners of EA. EA stockholders will receive $210 in cash per share. This is a 25% premium over EA’s pre-deal share price of $168.32. This deal is expected to close in 2027 and is subject to approval by EA’s shareholders and relevant regulators.
Following this deal, EA will remain headquartered in California, and Andrew Wilson will remain the company’s CEO. Once the deal closes, EA will be delisted from public markets.
Who are “The Consortium”
EA is being purchased by three groups: PIF, Silver Lake, and Affinity Partners. PIF is the Saudi Arabia Public Investment Fund, one of the world’s largest sovereign wealth funds. This aspect of EA’s deal is concerning to many, given its ties to the government of Saudi Arabia and the potential impact it could have on EA’s future games.
Silver Lake is a private equity firm that specialises in technology. Earlier this year, it purchased a 51% stake in Altera, a section of Intel, for $4.375 billion.
Finally, there is Affinity Partners, which was founded and is led by Jared Kushner, the son-in-law of US President Donald Trump. It’s possible that their involvement in the deal may help secure government approval for this deal in the US, despite Saudi Arabia’s involvement.
Will going private help EA?
If this deal passes, EA will become a private company. This means that EA will no longer be beholden to shareholders. However, they will be beholden to “The Consortium”. Furthermore, the $20 billion in debt used to acquire the company will need to be paid. EA will need to generate enough income to pay off this debt and satisfy its new owners.
While this deal could give EA more freedom, it remains to be seen how EA will change once it goes private. EA is one of the world’s largest video game publishers. Its IP includes Battlefield, The Sims, Need for Speed, Dragon Age, Mass Effect, EA Sports FC (formerly FIFA), Madden, and the F1 series. This acquisition is huge, and it could have a significant impact on the video game industry.
You can join the discussion on EA’s planned buyout on the OC3D Forums.
