Electronic Arts set for historic $55 billion privatization deal in Battlefield maker’s leveraged buyout
EA Games to Undergo Landmark $55 Billion Acquisition
Electronic Arts (EA) is poised for a monumental transformation as it is set to be taken private in a record-breaking $55 billion leveraged buyout. This acquisition is orchestrated by a consortium featuring Silver Lake, Saudi Arabia’s Public Investment Fund (PIF), and Jared Kushner’s Affinity Partners. The gaming powerhouse behind popular titles like “Battlefield” is poised to benefit significantly from this transaction as the gaming sector shows signs of recovery.
Largest Leveraged Buyout in History
This acquisition will surpass previous records in leveraged buyouts, including the notable 2007 takeover of TXU Energy, as well as iconic transactions involving Toys “R” Us and Hertz. This deal is a testament to the resurgence of global deal-making, driven by more favorable borrowing conditions and renewed enthusiasm for large-scale acquisitions.
Details of the Financial Agreement
EA shareholders are set to receive $210 per share in cash, reflecting a substantial 25% premium based on EA’s closing price on September 25. This valuation translates to an estimated equity value of $52.54 billion. The transaction is anticipated to conclude in the first quarter of the fiscal year 2027.
| Deal Components | Value |
|---|---|
| Equity Investment | $36 billion |
| Debt Financing by JPMorgan | $20 billion |
Strategic Timing for Electronic Arts
This pivotal deal arrives at a crucial juncture for EA, which relies heavily on its successful sports lineup and action shooter properties. As the gaming landscape evolves, EA is preparing to launch “Battlefield 6,” banking on its established and renowned brand. While the $210 share price is attractive, analysts at Benchmark suggest that EA’s true value might be higher, given its strong upcoming pipeline, potentially adding over $2 billion in incremental bookings by the fiscal year 2028.
Funding and Regulatory Considerations
The funding framework will incorporate cash contributions from Silver Lake, the PIF, and Affinity Partners, along with the rollover of PIF’s current stake in EA. The agreement carries a $1 billion termination fee clause, applicable if EA opts for a different merger post-shareholder rejection or if the consortium faces significant regulatory delays.
As this historic deal unfolds, it marks a significant shift in the landscape of video gaming economics, positioning EA under the aegis of deep-pocketed investors primed for the industry’s next wave of growth.
