EA Nears $50 Billion Deal to Go Private with Major Investors

Electronic Arts (EA) is reportedly on the verge of a significant transformation, as it prepares to enter a $50 billion deal that would take the company private. According to a report by The Wall Street Journal, a consortium of investors is in discussions to acquire the video game giant, which has been publicly traded since it filed for an initial public offering (IPO) in 1990.

The group of investors includes private equity firm Silver Lake, Saudi Arabia’s Public Investment Fund (PIF), and Jared Kushner‘s Affinity Partners. Notably, the PIF is already a major stakeholder in EA, holding almost 10 percent of the company. This potential buyout aligns with Saudi Arabia’s broader strategy to diversify its economy away from oil dependency, with significant investments in the gaming sector.

Saudi Arabia has demonstrated a strong interest in the video game industry, acquiring stakes in various companies over the past few years. In addition to its involvement with EA, the PIF has also invested in notable firms such as Take-Two Interactive, Activision Blizzard, Nintendo, and the Embracer Group. Earlier this year, the maker of Pokémon Go, Niantic, sold its gaming division to a Saudi-owned company, further illustrating the kingdom’s commitment to the sector.

Despite its current stake in EA, Silver Lake does not have extensive investments in the gaming industry, with its most significant holding being in Unity. Nevertheless, the firm’s involvement in the buyout may signal a shift in its investment strategy as it seeks to capitalize on the lucrative gaming market.

Bloomberg and The Financial Times speculate that an announcement regarding the buyout could occur as soon as next week. However, details remain tentative, and changes may arise before any formal agreement is finalized. If this $50 billion deal proceeds, it would mark the largest leveraged buyout in history, highlighting the growing financial clout of private investors in the gaming industry.

Analysts suggest that the PIF’s keen interest in EA stems from the company’s consistent annual releases of popular sports titles, including Madden and NHL. These franchises offer predictable revenues, making EA an attractive target for investment.

As the negotiations progress, the outcome could reshape the landscape of the gaming industry, with implications for both the market and consumers. With increasing investments from sovereign funds and private equity, the future of gaming is evolving rapidly, reflecting broader economic shifts both regionally and globally.