Video game developer Electronic Arts Inc. has agreed to sell its shares to a group of private investors in a deal that values the company at approximately $55 billion, making it the largest leveraged buyout in history, UNN reports with reference to Bloomberg.
Details
According to a statement released on Monday, a consortium including Silver Lake Management, Saudi Arabia's Public Investment Fund (PIF), and Jared Kushner's Affinity Partners has agreed to pay $210 per share in cash for the Redwood, California-based company. This is a 25% premium over its share price before negotiations, information about which leaked on Friday.
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Electronic Arts, maker of EA Sports FC and The Sims, is selling its shares amid sluggish growth in the $178 billion video game industry after a surge in sales during pandemic-induced lockdowns. The company, which has undergone numerous cutbacks, is looking for new growth areas to inspire players who prefer free, constantly updated franchises rather than spending up to $80 on new games.
The deal will be financed by funds from the consortium partners, with Saudi Arabia's PIF fund rolling over its current 9.9% stake in the company, which will amount to approximately $36 billion. JPMorgan Chase & Co. will provide $20 billion in debt financing. According to the company's statement, the deal includes a $1 billion breakup fee.
Electronic Arts shares rose 5.2% in early trading. Shares of gaming companies, including Take-Two Interactive Software Inc. and Roblox Corp., also rose.
Addition
Founded in 1982, Electronic Arts has become one of the world's largest independent video game publishers after a wave of industry consolidation in recent years. Activision Blizzard, the maker of the Call of Duty shooter, was acquired by Microsoft two years ago. This deal will supersede the $45 billion privatization deal for energy company TXU in 2007, becoming the largest deal in history.
It is also one of the largest M&A deals of 2025, demonstrating Wall Street's appetite for transformative mergers under a deal-friendly Trump administration, despite recession fears and geopolitical challenges affecting the broader economy.
Going private will allow the company to avoid the distractions associated with quarterly reporting and investor demands. EA's strengths in the sports sector provide the company with predictable revenue, which private equity funds value, the publication writes. The company's sports games, including Madden NFL, were among the top ten most popular games in the industry last year, according to research firm Circana.
Analysts also expect sales growth from the release of Battlefield 6, the latest game in the Redwood City, California-based company's popular shooter series, scheduled for release on October 10. Early buzz around the game has been strong and contributed to a 15% rise in EA shares this year before news of the buyout emerged.
Most large deals with a foreign investor require some government approval. The deal involves Affinity Partners, founded by Kushner, the son-in-law of the US president, during the first Trump administration. Affinity is backed by foreign investors, including those from the Middle East.