Saudi Arabia $55 Billion EA Game Hub Deal

Electronic Arts, the global gaming powerhouse behind titles like Battlefield and Madden NFL, is set to go private in a record-setting $55 billion leveraged buyout. 

The deal, led by Saudi Arabia’s Public Investment Fund (PIF), Jared Kushner’s Affinity Partners, and Silver Lake, marks the largest leveraged buyout in history if completed.

The move comes at a critical moment for the gaming industry, which has faced a prolonged downturn as players become more selective in their spending. 

For Saudi Arabia, the transaction underscores its strategy to transform the kingdom into a global gaming hub as part of its broader economic diversification away from oil.

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Key Takeaways

• EA agreed to a $55 billion buyout, the largest leveraged buyout ever announced.
• The consortium includes Saudi Arabia’s PIF, Affinity Partners, and Silver Lake.
• EA shareholders will receive $210 per share, a 25% premium to its pre-deal price.

Inside the EA Buyout Deal

According to the agreement, investors will fund the acquisition through a mix of $36 billion in cash, existing equity held by PIF, and $20 billion in debt financing provided by JPMorgan. 

EA’s shareholders will be bought out at $210 per share, representing a significant premium over the stock’s prior closing price.

EA’s CEO Andrew Wilson will remain in charge, and the company will continue operating from Redwood City, California. 

The transaction is expected to close in fiscal Q1 2027, barring regulatory delays. Both sides face $1 billion termination fees if the deal falls through.

Why Saudi Arabia is Betting on EA

Saudi Arabia’s $1 trillion sovereign wealth fund has been steadily ramping up its presence in gaming. The PIF has already invested billions into companies like Activision Blizzard, Nintendo, and Capcom. 

By leading the EA buyout, the kingdom is doubling down on gaming as a long-term growth industry that complements its push into sports, tourism, and entertainment.

Gaming is seen as a key pillar in Vision 2030, Saudi Arabia’s national diversification strategy. By backing the world’s biggest leveraged buyout in gaming history, Saudi Arabia is signaling its ambition to not only participate but also lead in shaping the global gaming landscape.

EA’s Sports Portfolio and Strategic Value

Despite the challenges in the gaming industry, EA’s sports franchises — including FIFA successor EA Sports FC and Madden NFL — remain strong profit drivers with recurring revenue through in-game purchases. 

Analysts note that these titles provide predictable cash flows, making EA especially attractive to private investors.

The upcoming release of Battlefield 6 is also expected to generate momentum. Benchmark analysts, however, argue that the $210 per share price underestimates EA’s long-term potential, citing a pipeline that could add more than $2 billion in bookings by 2028.

A New Era for Leveraged Buyouts

The EA deal also marks the return of mega-LBOs that dominated headlines before the 2008 financial crisis. The last comparable deal was the $45 billion takeover of TXU Energy in 2007, which later collapsed in bankruptcy. 

While critics point to those failures, proponents say EA’s strong intellectual property and steady sports portfolio make this deal more sustainable.

If successful, this transaction could open the door for other massive take-private deals in technology, gaming, and entertainment.

Final Thoughts

Saudi Arabia’s $55 billion buyout of Electronic Arts represents both a bold financial move and a strategic bet on gaming as the future of entertainment. 

For EA, the deal offers stability and resources to pursue long-term growth away from the pressures of public markets. For Saudi Arabia, it is a crown jewel in its quest to establish itself as a global gaming hub.

As the industry watches how this historic deal unfolds, one thing is clear: gaming has moved from the periphery of entertainment to the core of geopolitical and financial strategy.

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FAQs

What is the value of the EA buyout deal?

The deal values Electronic Arts at $55 billion, making it the largest leveraged buyout in history.

Who is buying Electronic Arts?

The consortium is led by Saudi Arabia’s Public Investment Fund, Affinity Partners founded by Jared Kushner, and private equity firm Silver Lake.

How much will EA shareholders receive?

Shareholders will receive $210 per share in cash, representing a 25% premium over EA’s pre-deal stock price.

Why is Saudi Arabia investing in gaming?

Saudi Arabia is using its $1 trillion PIF to diversify its economy, with gaming and esports as key pillars of its Vision 2030 strategy.

What happens to EA after the buyout?

EA will remain headquartered in California with Andrew Wilson as CEO, focusing on long-term growth of its sports franchises and new game releases.