The acquisition of the popular video game developer, such as The Sims, is being carried out by a consortium led by Saudi Arabian representatives. This is reported by UNN with reference to CNN and AFP.
Details
Electronic Arts, one of the giants of the gaming industry, was sold today for $55 billion to a group consisting of the venture capital firm Silver Lake, PIF (Saudi Arabia's Public Investment Fund), and Affinity Partners.
The acquisition of Electronic Arts (EA) for $55 billion became a historic event, as the largest business deal ever recorded in the gaming industry.
Interestingly, despite the change in management, the current leadership remains in power, ensuring strategic continuity. The decision to acquire EA, as stated, will allow the company to expand its presence in digital entertainment, sports, and technology, opening doors to new interactive experiences.
Reference
EA develops and publishes games based on well-known franchises such as Battlefield, Need for Speed, The Sims, Medal of Honor, Command & Conquer, Dead Space, Mass Effect, Dragon Age, Titanfall, and Star Wars, as well as EA Sports games.
LBO deal
This deal is a classic case of a leveraged buyout (LBO).
In this case, it is about acquiring control over a company. The goal is to restructure the business, increase efficiency and profitability.
Components of the operation:
- the buyer invests only a part of the capital;
- the larger part comes from debt;
- the debt is repaid over time from the money earned by the acquired enterprise.
Addition
The acquisition deal will be completed in the first quarter of fiscal year 2027.
The deal will be financed by $36 billion in equity from the consortium members and $20 billion in debt from JPMorgan Chase
There are serious prospects for EA - the new deal will contribute to the company having a new controlling shareholder with a typical focus on private equity. In this context, cost reductions and a focus on higher-profit franchises are promised.
At the same time, experimental or less profitable EA projects may lose ground.
Market impact
The acquisition underscores PIF's growing influence in the global gaming market. The fund already owns Savvy Games Group and has stakes in giants such as Activision Blizzard, Take-Two, Nintendo, and Embracer. Now, with the acquisition of EA, Saudi Arabia further strengthens its position as a major investor in the industry.
Recall
Earlier, UNN reported that Electronic Arts Inc. agreed to sell shares to a group of private investors. The Public Investment Fund (PIF) of Saudi Arabia and Jared Kushner's Affinity Partners agreed to pay $210 per share in cash for the Redwood, California-based company in the USA.
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