Saudi Arabia deepens gaming push with $55 billion EA takeover

• EA purchased for $55 billion by Silver Lake with backing from Saudi Arabia’s PIF.
• Deal offers PIF management in one in every of gaming sector’s greatest takeovers.

Electronic Arts, the studio behind “Battlefield,” “Madden NFL,” and “EA FC”, is ready to alter palms in a large $55 billion takeover. As reported by Reuters, the deal, backed by Saudi Arabia’s Public Investment Fund (PIF) and led by the non-public fairness agency Silver Lake, is without doubt one of the largest buyouts in historical past and alerts Saudi Arabia’s deepening push into the worldwide gaming and leisure sector.

For Silver Lake, the acquisition caps years of curiosity in EA. For Saudi Arabia, it’s an opportunity to safe a cultural and business asset that matches into its broader ambitions for the gaming trade.

Earlier this yr, throughout a method session, Silver Lake executives and Jared Kushner, Donald Trump’s son-in-law and former White House adviser, started shaping the settlement, in line with individuals accustomed to the discussions. One supply mentioned the talks began between Silver Lake co-CEO Egon Durban and Kushner.

The $55 billion deal was introduced on Monday. It will broaden Silver Lake’s holdings in gaming, sports activities, and leisure whereas giving PIF a long-term stake in a prime gaming firm. EA was first approached throughout the summer season, the individuals mentioned.

PIF will grow to be EA’s majority shareholder, and Kushner’s non-public fairness agency, Affinity Partners, will personal 5%, one supply mentioned.

Before the deal, PIF already held practically 10% of EA and had a number of gaming investments. That made it a pure associate for Silver Lake, the particular person added. Kushner performed a key position in connecting the events.

Kushner based his firm, Affinity, in 2021 and has acquired backing from funds in Saudi Arabia, Qatar, and the UAE. In the announcement, he mentioned he grew up taking part in EA video games and nonetheless performs them together with his kids.

Durban referred to as EA a particular firm and mentioned the group plans to speculate closely to develop the enterprise. EA and the consortium’s spokesperson declined to remark.

Saudi Crown Prince Mohammed bin Salman has mentioned he likes to chill out by taking part in video video games with family and friends. He has additionally laid out plans for Saudi Arabia to grow to be a world hub for video games and e-sports by 2030. “Every year we have a 15% to 25% profit so it’s really amazing and we do not want to miss that,” he informed Fox News two years in the past, referring to PIF’s returns from investments in e-sports tournaments.

“This isn’t just a spreadsheet deal. It’s Saudi Arabia buying time, talent, and cultural clout in one shot,” mentioned Joost van Dreunen, a video games professor at New York University’s Stern School of Business. “It puts a trophy IP house at the tip of the Saudi Vision 2030 spear, backed by a government that has earmarked $38 billion for games and sees interactive entertainment as both soft power and long-run monetisation.”

PIF has been pouring cash into gaming via its Savvy Games Group for some years. It has invested in main publishers like Activision Blizzard, Nintendo, and Take-Two Interactive as a part of the dominion’s effort to diversify its economic system away from oil.

EA’s standard franchises and the possibility to construct game-making capabilities in Saudi Arabia pushed PIF to extend its funding, one particular person mentioned.

Saudi Arabia’s e-sports basis lately introduced a brand new nationwide match with EA as a associate. Meanwhile, Qiddiya – PIF’s giant leisure and tourism mission in Riyadh – plans to draw 10 million guests a yr to its gaming district by 2030. The website goals to incubate 30 sport improvement corporations.

The consortium is investing $36 billion within the EA deal, together with PIF’s current stake, and elevating one other $20 billion in debt from JPMorgan, EA mentioned Monday.

One supply mentioned lenders have been prepared to finance the buyout as a result of there’s been a scarcity of used mortgage offers lately, with non-public fairness exercise slowing down. EA shareholders will obtain $210 per share in money, a 25% premium over the closing worth on September 25, earlier than information of the deal surfaced.

Some analysts assume the worth is just too low. “The true earnings power of EA is only beginning to emerge,” Benchmark analysts wrote. The firm’s inventory had been buying and selling close to document highs, in line with LSEG information.

The merger settlement offers EA 45 days to think about different provides, however van Dreunen doesn’t anticipate any to look. “Matching it would require deep pockets and a high tolerance for scrutiny. A strategic bidder would face antitrust and cultural blow-back, while private equity would struggle to pencil the use,” he mentioned.

The deal nonetheless wants regulatory approval, however analysts don’t see main obstacles. “Given today’s broadly constructive Western-Saudi ties, the consortium is more likely to face ‘box-ticking’ reviews and a few raised eyebrows than outright resistance,” mentioned David O’Hara of MKP Advisors. The closing is predicted by the second quarter of 2026.

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