EA agrees to historic leveraged buyout
Electronic Arts, the gaming giant behind franchises like “Battlefield” and “Madden NFL,” is set to go private in a massive $55 billion deal — the largest leveraged buyout in history. The transaction brings together Saudi Arabia’s Public Investment Fund (PIF), Jared Kushner’s Affinity Partners, and private equity firm Silver Lake, with financing support from JPMorgan.
The consortium will fund the acquisition with $36 billion in cash and equity held by PIF, plus $20 billion in debt. EA shareholders will receive $210 per share in cash, representing a 25% premium over its last closing price before reports of the deal surfaced. The company’s stock jumped over 5% after the announcement.
This bold move positions EA for long-term strategic growth and injects fresh capital into the gaming sector at a time when the industry faces demand volatility and rising development costs. Analysts believe the deal enables EA to explore opportunities that may have been considered too risky as a publicly traded company.
Saudi Arabia pushes gaming as part of economic shift
For the Saudi sovereign wealth fund, the deal represents a high-profile step toward transforming the country into a global force in gaming and sports entertainment. The investment aligns with Saudi Arabia’s broader Vision 2030 plan to diversify its economy away from oil by expanding into digital, tourism, infrastructure and entertainment sectors.
PIF’s growing footprint in the gaming world underscores its commitment to establishing the kingdom as a hub for esports and blockbuster game development. EA’s proven franchises and recurring digital revenue streams make it an attractive asset for long-term returns in the gaming economy.
Jared Kushner’s Affinity Partners and other Middle Eastern investors, including from Qatar and the UAE, are also participating in the deal. The transaction is expected to close in the first quarter of EA’s fiscal year 2027. EA will remain headquartered in Redwood City, California, with CEO Andrew Wilson continuing in his role.
Analysts split on valuation amid strong pipeline
While the $210 per share offer represents a premium, not all analysts agree on the valuation. Some argue the price undervalues EA’s long-term earnings potential. Benchmark analysts noted that with “Battlefield 6” on the horizon and a robust pipeline projected to add $2 billion in bookings by fiscal 2028, the company’s intrinsic value may be significantly higher.
The company’s sports franchises, particularly FIFA and Madden, generate consistent revenue from in-game purchases. These titles remain among the most lucrative in the industry due to their global fan base and high retention. The new backing is expected to further solidify EA’s dominance in the competitive gaming landscape.
Analysts at Freedom Capital Markets suggest that going private could help EA pursue strategic growth without the constraints of public market expectations. The deal also removes quarterly earnings pressures that can limit innovation in a hit-driven industry.
Buyout echoes past LBO risks
The EA transaction revives memories of pre-financial crisis mega buyouts, such as the $45 billion acquisition of TXU Energy in 2007 — a deal that ultimately ended in bankruptcy. Other high-profile LBOs like Toys “R” Us and Hertz also struggled post-acquisition, with both companies filing for bankruptcy years after being taken private.
Still, the consortium behind the EA deal has structured safeguards, including a $1 billion breakup fee if the company backs out or accepts a better offer. The consortium itself faces a matching penalty if regulatory delays extend beyond September 2026 or if contractual obligations are breached.
The comeback of such large-scale deals suggests growing risk appetite among global investors despite higher borrowing costs. If successful, this buyout could mark a turning point in private equity’s approach to high-value, IP-rich targets in the tech and entertainment sectors.
