Video game giant Electronic Arts has agreed to a deal to sell the company for $55 billion to a consortium including Saudi Arabia's Public Investment Fund, Silver Lake and Jared Kushner's Affinity Partners.
The deal would be the largest leveraged buyout in history, EA said in a statement on Monday.
"While that in itself is a milestone, it also officially waves the green flag on sponsors resuming megadeal transactions following several years of fishing for opportunities down market due to market headwinds such as higher borrowing costs," said Kyle Walters, a private equity analyst at PitchBook.
The deal will take EA private, with the purchasing price putting a 25 per cent premium on its share price at market close on September 25, with stockholders receiving $210 per share in cash.
EA is best known as the maker behind video game series including EA FC (formerly known as Fifa), The Sims, Battlefield and Mass Effect. EA said the deal consists of an equity investment of roughly $36 billion and $20 billion of debt financing committed by JPMorgan Chase, of which $18 billion is expected to be funded at close. EA will remain headquartered in Redwood City, California, and continue to be led by Andrew Wilson as chief executive.
The company has “delivered extraordinary experiences for hundreds of millions of fans, built some of the world’s most iconic IP, and created significant value for our business”, Mr Wilson said. “Looking ahead, we will continue to push the boundaries of entertainment, sports, and technology.”
The purchase marks a significant milestone for PIF, which has been expanding its presence in the gaming industry in recent years.
PIF’s Savvy Games Group owns the largest esports company in the world, ESL FACEIT Group, a merger between two esports organisers that it bought. It also acquired US games publisher Scopely.
In March, Scopely also acquired Niantic's gaming business, which includes mobile game Pokemon Go, for $3.5 billion.
The gaming and esports industry is a key element of Saudi Arabia's Vision 2030, which seeks to diversify the kingdom's economy away from oil into new sectors. Saudi Arabia's national gaming and esports strategy is aimed at positioning the country as a global hub for the sector.
The kingdom recently hosted the Esports World Cup in Riyadh, and is expected to host the first edition of the Olympic Esports Games in 2027.
“PIF is uniquely positioned in the global gaming and esports sectors, building and supporting ecosystems that connect fans, developers, and IP creators,” said Turqi Alnowaiser, deputy governor and head of international investments at PIF.
