From Riyadh to Silicon Valley: How EA turned the jewel of Saudi Arabia’s gaming imaginative and prescient

LONDON, Sept 30(Reuters) – For years, tech-focused buyout group Silver Lake coveted online game developer Electronic Arts, the ability behind the favored “Battlefield” and “Madden NFL” sequence.

In a brainstorming session this spring, Silver Lake buyers and U.S. President Trump’s son-in-law Jared Kushner began hammering out plans for what turned the world’s largest leveraged buyout, three sources acquainted with the talks mentioned. One of the individuals mentioned the talks began between Silver Lake co-CEO Egon Durban and Kushner.

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PIF will find yourself as EA’s majority shareholder whereas Kushner’s non-public fairness fund Affinity Partners will personal 5%, one of many individuals mentioned.

Given that PIF already owned virtually 10% of EA earlier than the deal, based on LSEG knowledge, and had gaming investments, it made sense for Silver Lake to take a look at the fund as a pure accomplice, the individual added, noting that Kushner performed an necessary position in brokering it.

Kushner, a high aide to Trump throughout his father-in-law’s first time period within the White House, based Affinity in 2021 and has investments from funds in Saudi Arabia, Qatar and the United Arab Emirates. He mentioned in Monday’s announcement that he grew up taking part in EA video games and enjoys taking part in them along with his youngsters.

Durban added that EA was particular and mentioned the consortium will make investments closely to develop the enterprise worldwide and speed up innovation.

EA and a spokesperson for the consortium declined to remark.

“Every year we have a 15% to 25% profit so it’s really amazing and we do not want to miss that,” the Prince mentioned in a Fox News interview two years in the past, referring to PIF’s annual return on investments in skilled online game competitions referred to as esports, wherein gamers or groups vie for prize cash.

“This isn’t just a spreadsheet deal. It’s Saudi Arabia buying time, talent, and cultural clout in one shot,” mentioned Joost van Dreunen, 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 monetization.”

As a part of that purpose, the virtually $1 trillion Public Investment Fund has made main outlays in online game publishers in recent times via its Savvy Games Group.

EA’s well-known franchises and types, in addition to the possibility for PIF to carry game-developing capabilities to the dominion, helped persuade the fund to double down on its funding, one of many individuals mentioned.

The consortium is investing $36 billion within the EA buyout, together with PIF’s present stake, supported by $20 billion in debt financed by JPMorgan, EA mentioned Monday.

The financing was potential as a result of a dearth of offers for buyers in leveraged loans, as non-public fairness companies have largely stayed on the sidelines in recent times, one of many sources and a fourth individual with data of the deal mentioned.

EA shareholders will obtain $210 per share in money, a 25% premium over the inventory’s closing value on September 25 earlier than stories of a deal emerged.

While the merger settlement permits 45 days for a superior bid to emerge, Van Dreunen noticed that as unlikely to occur. “Matching it would require deep pockets and a high tolerance for scrutiny. A strategic bidder would face antitrust and cultural blowback, while private equity would struggle to pencil the leverage,” he mentioned.

The deal would require regulatory approvals however is unlikely to face headwinds, some analysts mentioned. “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, as implied by the Q2 2026 expected closing date,” mentioned David O’Hara, of MKP advisors in a word revealed on Monday.

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