The Saudi Arabia Public Investment Fund is poised to acquire a staggering 93.4% stake in Electronic Arts Inc. (EA) as part of a landmark buyout proposal estimated at $55 billion, according to a report by the Wall Street Journal. This acquisition, which would mark the largest leveraged buyout in history, was detailed in a recent filing with a Brazilian antitrust regulator and may reshape the landscape of the gaming industry.
Under this plan, private equity firm Silver Lake Partners will hold 5.5% of EA, and Jared Kushner’s Affinity Partners will control 1.1%. Representatives from EA, Silver Lake, and Affinity Partners have yet to respond to inquiries regarding the deal.
The buyout was first announced in September and is set to proceed with a shareholder meeting planned for later this month to secure approval. Should the deal receive the green light, EA, known for blockbuster franchises like “The Sims” and “Madden NFL,” will transition to a private entity.
This significant move comes during a period of consolidation within the video game sector, as companies grapple with regaining the growth rates enjoyed during the pandemic. Despite the ongoing popularity of video games—evident in the successful adaptation of some franchises into films or series—EA’s annual revenue has struggled, remaining relatively flat between $7.4 billion and $7.6 billion over the past three fiscal years.
The outcome of the upcoming shareholder vote will be closely monitored, as it may set a precedent for future investments and shifts in ownership dynamics in the gaming industry.