Electronic Arts, the creator of popular video games such as Madden NFL, Battlefield, and The Sims, is set to be acquired for a staggering $55 billion US in what is hailed as the largest leveraged buyout attempt ever recorded.
The acquisition deal, unveiled on Monday, outlines that the private equity firm Silver Lake Partners, along with Saudi Arabia’s sovereign wealth fund PIF and Affinity Partners, will be purchasing Electronic Arts’ shares at $210 per share. Notably, Affinity Partners is a private equity firm managed by Jared Kushner, who is the son-in-law of President Donald Trump.
This acquisition would transition Electronic Arts (EA) into a private entity, surpassing the $32 billion transaction that took Texas utility TXU private back in 2007.
Should the transaction proceed as projected, it will mark the end of EA’s 36-year journey as a publicly traded company, which commenced with its shares closing at an adjusted value of 52 cents on its debut trading day. The company was established seven years after its founding by former Apple employee William “Trip” Hawkins, who developed a passion for baseball and football through analog games like Strat-O-Matic during the 1960s.
Since 2013, EA has been under the leadership of its current CEO, Andrew Wilson. The company operates various studios and offices in Canada, including locations in Edmonton, Montreal, Toronto, Vancouver, and Victoria, B.C., as indicated on its official website.
This acquisition represents Silver Lake’s involvement in a second prominent deal within the technology sector, following its participation in a joint venture led by Oracle related to the acquisition of TikTok’s U.S. operations. Silver Lake’s history includes the acquisition of Skype in 2009 for $1.9 billion and the purchase of Dell for $24.9 billion in 2013, with Dell subsequently returning to the stock market in 2018 after restructuring.
Privatization will enable EA to reorganize its operations without the external pressures and scrutiny faced by publicly traded companies, which can sometimes lead to decisions focused on short-term financial goals. Despite EA’s dedicated fan base, the company has experienced stagnant annual revenues over the past three fiscal years, ranging from $7.4 billion to $7.6 billion.
In a competitive landscape, EA’s rival Activision Blizzard was acquired by Microsoft for nearly $69 billion in 2023, while the rise of mobile game developers like Epic Games has intensified the market competition. Post-privatization, companies often undergo restructuring, including layoffs, although there is no confirmation of such measures for EA at this time. Following a 5% reduction in its workforce in 2024, EA concluded March with 14,500 employees and later implemented additional layoffs in May.