In a stunning announcement on Monday, video game powerhouse Electronic Arts (EA) revealed its agreement to be acquired and taken private in a colossal $55 billion transaction. This groundbreaking deal is spearheaded by a powerful investment group, notably featuring a firm led by Jared Kushner, former President Trump’s son-in-law, alongside Saudi Arabia’s prominent sovereign wealth fund.
Under the terms of the agreement, shareholders will receive a generous $210 per share in cash, representing a substantial 25 percent premium over the company’s stock price just before news of the impending deal became public.
Should this acquisition successfully close, it will make history as the largest buyout of a publicly traded company ever recorded, even without adjusting for inflation. A significant portion of the funding, a massive $20 billion, will be secured through a loan from JPMorgan Chase.
At the helm of this ambitious undertaking is Saudi Arabia’s Public Investment Fund (PIF), which already holds a considerable 10 percent stake in Electronic Arts. They are joined by the influential private equity firm Silver Lake and Jared Kushner’s investment vehicle, Affinity Partners.
This strategic acquisition underscores the Saudi fund’s ongoing drive to establish a stronger foothold in the global gaming industry, as it actively seeks to diversify its extensive investment portfolio beyond traditional oil revenues. Back in 2021, the PIF established the Savvy Games Group, an initiative designed to direct a planned $38 billion into the sector. This summer, Riyadh proudly hosted the Esports World Cup, a high-stakes video game tournament boasting an impressive $70 million prize pool.
The PIF’s expansion into gaming forms a crucial part of the kingdom’s larger strategic investment in the sports world. This includes significant backing for ventures such as LIV Golf, a direct competitor to the PGA Tour, a substantial stake in the Professional Fighters League, and considerable investments in both domestic and international soccer. Meanwhile, Electronic Arts itself is a colossal force in sports gaming, boasting globally recognized franchises like FIFA for soccer and Madden for American football.
Turqi Alnowaiser, Deputy Governor and Head of International Investments at the Public Investment Fund, emphasized in a recent statement that the Saudi fund is “uniquely positioned in the global gaming and e-sports sectors, actively building and supporting ecosystems that connect fans, developers, and intellectual property creators.”
Andrew Wilson, Electronic Arts’ Chief Executive, expressed his enthusiasm, stating, “I am more energized than ever about the future we are building.”
This massive buyout is not without hurdles, as it requires approval from the Committee on Foreign Investment in the United States (CFIUS). This interagency panel is tasked with scrutinizing international deals for potential national security risks. Lawmakers have previously voiced concerns, advocating for a closer look at the Saudi fund’s sports investments due to national security implications.
Aaron Bartnick, a former Biden administration official who specialized in national security reviews of foreign investments and is now a fellow at Columbia University, pointed out, “People don’t often think about video games and national security together, but these are platforms that reach millions of Americans and often collect a lot of personal data.” He anticipates that CFIUS will “want to take a close look even if they ultimately end up signing off” on the deal.
It’s worth noting the historically warm relations between the Trump administration and the Saudi government. The Saudi sovereign fund already holds a significant stake in Mr. Kushner’s investment firm, and Mr. Kushner himself maintained close ties with the kingdom during his tenure in government under Mr. Trump’s first term.
A substantial $1 billion termination fee is stipulated for Electronic Arts if its board opts out of the buyout or if shareholders reject the agreement. Conversely, the acquiring investors would incur a $1 billion penalty if, for instance, they fail to obtain the necessary regulatory approvals to finalize the transaction.
Should Electronic Arts receive and accept a superior offer, it would also be obligated to pay a termination fee. However, the likelihood of other potential buyers emerging is uncertain. While analysts had previously speculated that a major media entity, such as Disney, might attempt to acquire the gaming company, such a deal would almost certainly encounter intense regulatory scrutiny.
The video game industry experienced a significant boom in sales and popularity during the Covid-19 pandemic lockdowns. Despite this, games developed by Electronic Arts often involve substantial production costs. Furthermore, there’s a noticeable shift in consumer behavior, with many gamers increasingly gravitating towards mobile gaming platforms over traditional video game consoles.
The completion of this acquisition is projected for the second quarter of 2026. Electronic Arts will maintain its headquarters in Redwood City, California, and will continue under the leadership of CEO Andrew Wilson.
This proposed acquisition would eclipse the previous record for a public company buyout, which was the $32 billion (excluding debt) purchase of Texas utility company TXU by private equity firms in 2007, just prior to the global financial crisis.