One of the biggest deals in gaming history is official: EA will soon no longer be a publicly traded company.
Update from September 29:
The gigantic deal is now official: EA is being sold. For a sum of around 55 billion US dollars (equivalent to 47 billion euros), the video game company is to be transferred 100 percent to the ownership of a consortium of investors – and will then disappear from the stock market. EA has agreed to a corresponding offer.
According to company sources, the deal will “enable EA to drive growth and innovation faster and shape the future of the entertainment industry.” EA CEO Andrew Wilson is expected to remain in his position.
However, there are still a few hurdles to overcome before the sale is final, such as regulatory review (keyword: antitrust law). The actual closing is therefore expected to take until mid-2026.
The new owners of EA will be:
- PIF: Saudi Arabia’s sovereign wealth fund headquartered in Riyadh under Crown Prince Mohammed bin Salman
- Affinity Partners: The investment firm of Donald Trump’s son-in-law Jared Kushner
- Silver Lake: US investment firm based in California with a focus on private equity strategy
What does this mean? Journalist and industry expert Jason Schreier believes that the takeover will primarily be accompanied by drastic cost-cutting measures:
EA is likely to face highly aggressive cost-cutting measures in the coming months and years.
Due to the nature of the takeover (a so-called “leveraged buyout”), EA is entering into the new ownership structure with new debt of around $20 billion.
Schreier is certain: this means layoffs, more intrusive monetization, and massive cost-cutting measures that users will also feel the effects of.
GamesWirtschaft analyzes the sale, saying that such a mountain of debt will be “almost impossible to pay off without massive cost-cutting, restructuring, and additional revenue.”
Original message:
It would be the second-largest gaming deal in history. Only Microsoft’s acquisition of Activision-Blizzard involved more money. At least, if the figures currently circulating in the media are correct. At present, the alleged privatization of Electronic Arts by a group of investors has not yet been confirmed.
However, the claim comes from the Wall Street Journal, which is a fairly reliable source. According to the report, a deal is currently being negotiated in which all shares will be bought back for a reported $50 billion. EA would then no longer be a publicly traded company, but would belong exclusively to a group of investors.
According to current reports, this group includes three major investors in particular: the US investment company Silver Lake, the US investment company Affinity Partners, and the Saudi Arabian Public Investment Fund (PIF).
None of the three investors mentioned has confirmed the takeover yet, but according to current reports, it should be finalized as early as Monday.
What exactly does this mean?
If this deal were to actually go through, it would be a huge upheaval for Electronic Arts. The company has been publicly traded since 1989 and would now return to being entirely privately owned. The $50 billion would primarily be used to pay out the current shareholders.
No wonder, then, that EA’s share price has risen significantly since the takeover reports began circulating. On Friday, September 26, the company’s market value rose by a whopping 15 percent, climbing to a record high.
As a private company, EA would not be under such pressure to deliver quarterly public successes, but could theoretically take a more long-term approach. However, the takeover poses completely different financial challenges.
According to reports, the takeover is a so-called “leveraged buyout.” This means that investors are not paying the estimated $50 billion entirely out of their own pockets. Instead, they are financing part of it, while the rest is covered by debt that EA itself bears.
EA would therefore be responsible for repaying the debt it has incurred. This could well lead to cost savings, restructuring and, yes, even layoffs within the company. There are even examples of such buyouts ruining companies – but since EA is a large and reliably profitable company, we consider the chances of this happening to be very low.
Who are the new owners?
If the deal goes through, EA will not only be a private company again, it will also have completely new owners. However, the alleged investors are primarily purely economic partners who are unlikely to take on any creative or administrative responsibilities. The investors are primarily interested in increasing value and making a profit.
Nevertheless, there is a degree of skepticism, particularly due to the involvement of Saudi Arabia. The country is repeatedly criticized for numerous human rights violations and is attempting to improve its reputation through targeted investments in sports, entertainment, and gaming—but many critics see this primarily as a strategy to distract from the emergencies in the country.
You can find out how to view Saudi Arabia’s expansion into the gaming sector in our report, which we have linked above. Incidentally, Saudi Arabia already holds around ten percent of the shares in Electronic Arts.
The investment group’s stake in Affinity Partners, owned by Jared Kushner, the son-in-law of US President Donald Trump, is also being viewed critically.
The extent of the investors’ influence will ultimately depend on how the shares in EA are distributed, if it actually comes to that.
