Video game maker EA agrees to $71 billion sale in largest leveraged buyout on record
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Electronic Arts, the maker of The Sims and Battlefield, is selling amid sluggish growth after sales swelled during the pandemic lockdowns.
PHOTO: REUTERS
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NEW YORK - Electronic Arts (EA) has agreed to sell itself in the largest leveraged buyout on record to a group of investors that includes a firm managed by US President Donald Trump’s son-in-law Jared Kushner and Saudi Arabia’s sovereign wealth fund.
The massive deal, valuing the video-game company at about US$55 billion (S$71 billion), is the latest effort by Saudi Arabia to diversify beyond oil into sports and gaming, a financially tumultuous industry that is increasingly at the heart of youth culture around the planet.
Saudi Arabia’s Public Investment Fund (PIF), along with Silver Lake Management and Mr Kushner’s Affinity Partners, agreed to pay US$210 per share in cash, a 25 per cent premium to where EA traded before the talks leaked on Sept 26.
JPMorgan Chase & Co is providing US$20 billion of debt, the largest debt commitment for a buyout ever.
The sale is the latest sign that the deal boom expected under the Trump administration is starting to take hold, cementing the most active quarter for mergers in more than three years.
It also comes at a particularly turbulent time for the US$178 billion video-game industry. During the initial pandemic lockdowns, gameplay soared and gaming culture hit new heights as TV shows and movies based on them dominated the global charts. All of which inspired video-game companies to ramp up the development of new and increasingly expensive titles with budgets that often ran into the hundreds of millions of dollars.
But lately, amid the resulting glut of new, pricey games, many players have decided to stick with old favourites rather than purchasing new titles – resulting in faltering sales, widespread layoffs and studio closures across the industry.
Electronic Arts, known for popular games such as Battlefield and EA Sports FC, ranks among the largest video-game companies in the US. The Redwood City, California-based company’s sports titles, including Madden NFL, accounted for four of the industry’s top 10 best sellers in 2024, according to the market research firm Circana.
Recently, amid several rounds of layoffs, the company has been seeking new areas of growth to inspire players who have gravitated toward free-to-play franchises that are continually updated rather than splash out for new titles that can cost US$80.
Going private will remove the distraction of quarterly earnings and investor demands. EA’s strength in sports gives the company the predictable revenue that private equity firms like.
The transaction will be funded with cash from the consortium partners, and Saudi Arabia’s PIF will roll over its existing 9.9 per cent stake in the company, bringing the total equity investment of about US$36 billion. The deal comes with a termination fee of US$1 billion should it fall apart, according to a company filing.
For Saudi Arabia’s PIF, it’s the biggest bet yet on interactive entertainment for a fund that already has a significant investment in video games, including ownership of the maker of Pokemon Go. In 2023, the fund’s Savvy Games Group bought Scopely for US$4.9 billion, acquiring the company that released Monopoly Go!.
Most large deals with a foreign investor require some form of government approval. Affinity Partners – founded by the US President’s son-in-law during the first Trump administration – is backed by foreign investors, including some from the Middle East.
The pact displaces the roughly US$45 billion leveraged purchase of power company TXU in 2007 as the largest buyout on record. It’s also one of the largest M&A deal of 2025 and shows Wall Street’s appetite for game-changing mergers despite recession fears and geopolitical concerns impacting the broader economy.
Electronic Arts shares rose 4.8 per cent on Sept 29 morning in New York to US$202.73, off 3.5 per cent from the offer price.
Gaming companies including Take-Two Interactive Software and Roblox Corp also gained.
Founded in 1982, Electronic Arts is one of the world’s largest independent video-game publishers after a wave of industry consolidation of the past few years.
Activision Blizzard, maker of the Call of Duty shooter games, was acquired by Microsoft Corp two years ago.
“Our creative and passionate teams at EA have 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,” said Mr Andrew Wilson, chief executive officer of Electronic Arts. “This moment is a powerful recognition of their remarkable work.”
Analysts are also expecting a boost from Battlefield 6, the latest entry in the company’s popular shooter game franchise scheduled to be released on Oct 10.
Early buzz for the title has been strong and helped lift shares 15 per cent in 2025 before news of the buyout emerged.
Silver Lake, which has a long history of investing in the tech sector, is participating in the acquisition of the US business of TikTok, Bloomberg News had reported.
Goldman Sachs is serving as EA’s financial adviser and J.P. Morgan Securities is serving as financial adviser to the consortium.
Legal advisers include Wachtell, Lipton, Rosen & Katz for EA and Kirkland & Ellis, which is serving as legal counsel to the consortium. BLOOMBERG
