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Video games maker Electronic Arts is being taken private by a Saudi-backed consortium assembled by Jared Kushner and Silver Lake in a $55bn deal that ranks as the biggest-ever leveraged buyout.
The agreement values EA’s shares at $210 each, according to a statement on Monday, in what the consortium — which includes Saudi Arabia’s Public Investment Fund (PIF) — said was a 25 per cent premium to Thursday’s closing price in New York, before speculation of a deal pushed the shares higher.
The deal marks the largest take-private transaction in history, topping in dollar value the $45bn buyout of Texas utility group TXU in 2007. It also ranks as the biggest all-cash deal of the year so far.
“Electronic Arts is an extraordinary company with a world-class management team and a bold vision for the future,” said Kushner, who said he “grew up playing their games”.
EA, which is based in Redwood City, California, has among the richest content libraries of any video games maker, with blockbuster franchises including EA Sports FC, Madden NFL and The Sims.
Andrew Wilson, EA’s longtime chief executive, will be retained by the buyer group, leading the game developer as a private company after the takeover closes in the first half of 2027.
Financing for the takeover will come from $36bn of equity contributed by the buyer group, including PIF’s rollover of its existing 9.9 per cent equity stake in EA and a $20bn loan led by JPMorgan.
The deal is a huge bet that artificial intelligence can significantly cut EA’s operating costs, allowing the equity consortium to manage a large debt load on a company that historically carried limited net debt.
AI is already widely used across Silicon Valley to accelerate many kinds of computer programming. In games development, it can be used to replace voice actors and create backdrops and other assets, as well as automating play testing to avoid bugs before release.
But some believe the technology may soon be able to go much further in creating more realistic and responsive characters, or adapting storylines to players’ personal preferences.
The investors are betting that AI-based cost cuts will significantly boost EA’s profits in the coming years, people involved in the transaction told the Financial Times.
Kushner, the son-in-law of US President Donald Trump, played an instrumental role in getting the deal over the line. He and Egon Durban, co-chief of Silver Lake, began studying a possible takeover earlier this year, according to two people briefed on the talks.
The people said Kushner was key to getting PIF interested in participating in the takeover at a time when it is retrenching from some private investments.
He set up investment firm Affinity Partners after leaving the White House following Trump’s first term, and PIF is a large investor in Kushner’s fund.
People close to the discussions said Kushner’s involvement would also ease the deal’s path through the Committee on Foreign Investment in the US, which adjudicates on deals involving foreign buyers.
Durban said EA was an attractive target because of its “premier sports franchise, with accelerating revenue growth and strong and scaling free cash flow”. He added that Wilson had “doubled revenue . . . and driven a fivefold increase in market cap during his tenure” since becoming chief in 2013.
The PIF has bold plans to deploy up to $70bn a year in capital, generated from Saudi Arabia’s oil wealth, in sectors such as technology and real estate.
It already ranked among EA’s largest public shareholders and has also owned stakes in video games companies Nintendo and Take-Two Interactive.
In 2021, Saudi Arabia’s Crown Prince Mohammed bin Salman, who is a keen gamer, set up Savvy Games Group, a new PIF unit focused on games with a $38bn war chest. Savvy has acquired some of the most popular mobile games, including Scopely’s Monopoly Go and Pokémon Go, and is now hunting for deals in China, its chief recently told the FT.
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