Electronic Arts has become a private company: a $55 billion deal with the Saudi fund
- EA completed the privatization for $55 billion.
- The Saudi fund PIF owns 93.4% of the company.
- The deal includes $20 billion in debt from JPMorgan Chase.
- The company plans to cut costs and invest in AI.
Electronic Arts, known for creating series such as FIFA, Madden NFL, Battlefield, The Sims и Apex Legends, officially announced the completion of the deal that transfers the company to private status. The total value of the transaction was $55 billion, making it a record among similar buyouts in the gaming industry.
Who became the owner of EA?
The consortium of investors executing the buyout includes the American investment firm Silver Lake, the Asian Affinity Partners, and the sovereign fund of Saudi Arabia (Public Investment Fund, PIF). According to official documents, after the deal closes, PIF will receive 93.4% of the shares, Silver Lake will have 5.5%, and Affinity Partners will hold 1.1%.
Previously, EA had been publicly traded for over thirty years, with its shares listed on NASDAQ. Going private opens up more flexible opportunities for the company in capital management and strategic planning, but simultaneously strengthens the role of major investors.
The Role of the Saudi Fund
The sovereign fund PIF, controlled by the government of Saudi Arabia, has become the main shareholder. This is the first deal of its kind on such a scale, where one of the largest players in the video game industry is fully coming under the control of an Arab state. Experts note that this move could affect the geopolitical balance in the entertainment industry, considering Saudi Arabia's growing investments in the technology sector.
The deal also includes a large loan – $20 billion provided by JPMorgan Chase. The debt portion accounts for more than a third of the total purchase price, which creates obligations for debt servicing, but according to management, will allow for accelerated investments in new projects.
CEO Andrew Wilson characterized the deal in a press release as "the beginning of a new chapter," emphasizing the company's readiness to "boldly invest, accelerate innovation, and create next-generation games." Special attention will be given to the use of artificial intelligence to reduce costs and increase profitability.
The new owners plan to significantly cut costs, redirect part of the budget to AI-related developments, and strengthen EA's position in the global market, where competition is intensified by giants like Activision Blizzard and Ubisoft.
The trend towards the privatization of large technology companies has been observed for several years, but the scale and geopolitical context of the deal with PIF make it unique. It is expected that the change in ownership structure may affect future releases, monetization, and strategic partnerships of EA, as well as spark discussions among regulators and human rights organizations.
Source: 3DNews
