It’s in the game: EA in $55bn buyout in Saudi private equity-led deal
All-cash deal led by Saudi Arabia’s Public Investment Fund, supported by Silver Lake and Affinity Partners
The Saudi sovereign wealth fund, controlled by Crown Prince Mohammed bin Salman, already owns just under 10% of EA. It also has minority stakes in EA’s biggest rival, Activision Blizzard, as well as Nintendo and Take-Two Interactive.
The transaction has yet to be approved by shareholders, but the deal comes at a significant premium to the company’s stock price before rumours of a takeover started to circulate last week. If they vote in favour, they will receive $210 per share in cash. Regulatory approval, too, should be a formality – Jared Kushner is, after all, President Trump’s son in law.
However, the deal is not expected to close before the first quarter of 2027.
A major part of the attraction of EA as an investment is the regular revenue stream from its two major money-spinning franchises: the FIFA series and Madden NFL.
Andrew Wilson, chairman and CEO of Electronic Arts, is understandably positive about the deal. He described it as a “powerful recognition” of the work of EA’s creative teams in “deliver[ing] extraordinary experiences for hundreds of millions of fans”.
He continued: “Looking ahead, we will continue to push the boundaries of entertainment, sports, and technology, unlocking new opportunities.”
Turqi Alnowaiser, deputy governor and head of international investments at PIF, was similarly enthused. “PIF is uniquely positioned in the global gaming and esports sectors, building and supporting ecosystems that connect fans, developers and IP creators,” he said.
Many cynics, though, believe that the company has wrested on its laurels in recent years, squeezing as much as it can out of its two long-running franchises, FIFA and John Madden. Critics have argued that its full-price annual updates to those popular games often add little to the previous year’s iteration, beyond updates to players and player stats.
EA has also been a keen promoter of “loot boxes” that players, including children, can buy for in-game cosmetics and other features. Critics claim that this forces players to buy parts of games that used to be included in the price before the advent of the Internet and downloadable content, and that they amount to little more than a form of gambling.
In addition to the FIFA series and Madden NFL, the company is also responsible for publishing Apex Legends, Command & Conquer, The Sims, Dragon Age, Dead Space, the Star Wars series, and Mass Effect, among many others.
EA – originally Electronic Arts – was founded in 1982 by the former director of strategy and marketing at Apple, Trip Hawkins, in 1982. Hawkins went on to found the failed game console company 3DO in 1991.