The deal to take Electronic Arts private is expected to close in the first quarter of 2027, pending approval from shareholders.Dado Ruvic/Reuters
Electronic Arts EA-Q, maker of video games like Madden NFL, Battlefield and The Sims, is being acquired for US$52.5-billion in what could become the largest-ever buyout funded by private-equity firms.
The private equity firm Silver Lake Partners, Saudi Arabia’s sovereign wealth fund PIF, and Affinity Partners will pay EA’s stockholders US$210 a share. The companies value the deal at about US$55-billion, including debt. Affinity Partners is run by U.S. President Donald Trump’s son-in-law, Jared Kushner.
PIF, which was already the largest insider stakeholder in Electronic Arts, will be rolling over its existing 9.9-per-cent stake in the company.
The commitment to the massive deal is inline with recent activity by Saudi Arabia’s sovereign wealth fund, wrote Andrew Marok of Raymond James.
“The Saudi PIF has been a very active player in the video gaming market since 2022, taking minority stakes in most scaled public video gaming publishers, and also outright purchases of companies like ESL, FACEIT, and Scopely,” he wrote. “The PIF has made its intentions to scale its gaming arm, Savvy Games Group, clear, and the EA deal would represent the biggest such move to date by some distance.”
PIF is also a minority investor in Nintendo.
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Electronic Arts would be taken private and its headquarters will remain in Redwood City, Calif.
The total value of the deal eclipses the US$32-billion price paid to take Texas utility TXU private in 2007.
If the transaction closes as anticipated, it will end EA’s 36-year history as a publicly traded company that began with its shares ending its first day of trading at a split-adjusted 52 US cents.
The IPO came seven years after EA was founded by former Apple employee William (Trip) Hawkins, who began playing analog versions of baseball and football made by Strat-O-Matic as a teenager during the 1960s.
CEO Andrew Wilson has led the company since 2013 and he will remain in that role, the firms said Monday.
“Electronic Arts is an extraordinary company with a world-class management team and a bold vision for the future,” said Mr. Kushner, who serves as CEO of Affinity Partners. “I’ve admired their ability to create iconic, lasting experiences, and as someone who grew up playing their games - and now enjoys them with his kids - I couldn’t be more excited about what’s ahead.”
This marks the second high-profile deal involving Silver Lake and a technology company with a legion of loyal fans in recent weeks. Silver Lake is also part of a newly formed joint venture spearheaded by Oracle involved in a deal to take over the U.S. oversight of TikTok’s social video platform, although all the details of that complex transaction haven’t been divulged yet.
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Silver Lake has also previously bought out two other well-known technology companies, the now-defunct video calling service Skype in a US$1.9-billion deal completed in 2009, and a US$24.9-billion buyout of personal computer maker Dell in 2013. After Dell restructured its operations as a private company, it returned to the stock market with publicly traded shares in 2018.
By going private, EA will be able to reprogram its operations without being subjected to the investment pressures and scrutiny that sometimes compel publicly held companies to make short-sighted decisions aimed at meeting quarterly financial targets. Although its video games still have a fervent following, EA’s annual revenues have been stagnant during the past three fiscal years, hovering from US$7.4-billion to US$7.6-billion.
Meanwhile, one of its biggest rivals Activision Blizzard was snapped up by technology powerhouse Microsoft for nearly US$69-billion in 2023, while the competition from mobile video game makers such as Epic Games has intensified.
After being taken private, formerly public companies often undergo extensive cost-cutting that includes layoffs, although there has been no indication that will be the case with EA. After jettisoning about 5 per cent of its work force in 2024, EA ended March with 14,500 employees and then laid off several hundred people in May.
The deal is expected to close in the first quarter of 2027. It still needs approval from EA shareholders.
EA shares, which rose rose nearly 5 per cent Monday, had jumped 15 per cent Friday after rumors of a takeover began to circulate.
Editor’s note: This article has been updated to correct the name of the Savvy Games Group.