Sources indicate that Electronic Arts (EA) is nearing the completion of negotiations for a potential acquisition that would take the gaming giant private. The proposed deal, valued at approximately $50 billion, is reportedly being orchestrated by a consortium of investors. This group includes several private equity firms alongside Saudi Arabia’s Public Investment Fund (PIF). An official announcement regarding the transaction could surface as early as next week.
On September 26th, The Wall Street Journal published a report detailing the ongoing discussions between EA, renowned for its highly profitable sports franchises like Madden, and a number of private investment entities. Silver Lake is supposedly part of these investment groups, according to inside sources. The involvement of Saudi Arabia’s Public Investment Fund (PIF) is also noted, as the fund has notably increased its investment activity within the gaming sphere in recent years.
Representatives from Kotaku have reached out to EA for an official statement concerning these acquisition rumors.
The Wall Street Journal‘s reporting suggests that deal terms are still fluid, particularly regarding the final valuation. However, insiders suggest that EA’s potential valuation could reach $50 billion. The outlet highlights that, if completed at this valuation, the buyout would likely represent the largest leveraged acquisition in corporate history. The previous record was set in 2007 when private equity groups acquired TXU, a Texas-based utility firm, for $32 billion. Factoring out inflation, the current reported EA deal would nearly double that previous record.
Should this acquisition materialize, it would represent another significant investment by Saudi Arabia’s Public Investment Fund (PIF) within the gaming industry. This aligns with the Saudi Arabian government’s broader strategy, which some critics allege is an attempt to improve its international image, particularly regarding its human rights record, through investments in popular sectors like sports and gaming. The PIF has previously invested extensively in a variety of gaming companies, like Activision, Blizzard, Nintendo, Capcom, and Nexon. Furthermore, the PIF wholly owns SNK Corp, the company behind popular titles like King of Fighters and Metal Slug. It has been suggested that this ownership influenced the decision to include soccer star Cristiano Ronaldo in SNK’s fighting game, Fatal Fury: City of the Wolves.