Every now and then, you hear about one company acquiring another, such as Paramount’s bid to acquire Warner Bros. Discovery. Less common, however, is a country moving to acquire a company. That is what Saudi Arabia, through its sovereign wealth fund, the Public Investment Fund (PIF), plans to do with Electronic Arts (EA), the American video game giant behind Apex Legends, Battlefield, The Sims, and EA Sports titles like FIFA and Madden NFL.
PIF is part of a consortium that has agreed to buy out EA in a deal valued at about $55 billion. The group also includes private equity firm Silver Lake and Affinity Partners, an investment company founded by Jared Kushner, businessman and son-in-law of former U.S. president Donald Trump.
For EA, this means it will no longer be publicly traded. After 36 years on the stock market, the company is set to go private if the deal is finalized.
Why Saudi Arabia?
Saudi Arabia, long associated with oil wealth, is seeking to diversify its economy. PIF, worth around $1 trillion, is central to that goal. The fund is chaired by Crown Prince Mohammed bin Salman, who is reported to be a gaming enthusiast and sees video games as a pathway to creating tens of thousands of jobs and positioning the kingdom as a global hub for gaming and sports.
This interest in EA isn’t new. In 2021, Saudi Arabia bought $1.1 billion worth of EA shares, and since then it has accumulated a total of about $4.8 billion in the company’s stock.
The Structure of the Deal
The consortium will pay $210 per share, about 25 percent more than EA’s stock price before news of the talks leaked. That premium makes the deal attractive for shareholders.
The $55 billion valuation will be financed through a leveraged buyout, the largest ever recorded, according to Bloomberg. In such deals, buyers use a mix of their own cash and borrowed money, with the acquired company expected to help service the debt through its future earnings.
Of the total, the consortium is putting up about $36 billion in equity. The remaining $19–20 billion will come from debt financing, most of it arranged by JPMorgan Chase. Bloomberg reports this is the largest financing package ever put together by a single bank for a buyout. PIF is also rolling its nearly 10 percent existing stake into the deal rather than cashing out.
If either side walks away, the deal includes a $1 billion termination fee.
What Next?
Since rumors of the buyout began, EA’s shares have risen by about 20 percent. The transaction is expected to close in the first quarter of fiscal 2027.
EA CEO Andrew Wilson described the agreement as “one of the largest and most significant investments ever made in the entertainment industry.” He added that the company’s “values and commitment to players and fans around the world remain unchanged.”
