Electronic Arts (EA) has officially announced that it has entered into a definitive agreement to be acquired and taken private by an investor consortium in an all-cash transaction that values the company at approximately $55 billion. This transaction, which represents the largest all-cash sponsor take-private investment in history, confirms earlier reports of a nearing $50 billion deal and signals a major shift in the video game industry.

The Investor Consortium and Financial Structure

The investor group leading the buyout includes high-profile entities, combining sovereign wealth with private equity:

• Saudi Arabia’s Public Investment Fund (PIF): The sovereign wealth fund of Saudi Arabia, which is rolling over its existing 9.9% stake in EA. This move is part of the Kingdom’s “Vision 2030” strategy to diversify its economy and increase its significant investments in the global gaming sector.
• Silver Lake: A prominent private equity firm with a focus on technology investments.
• Affinity Partners: An investment firm founded and led by Jared Kushner, former White House senior advisor, which receives significant funding from the Saudi government.

The $55 billion valuation is composed of two main elements:

• An equity investment of approximately $36 billion** from the consortium partners (PIF, Silver Lake, and Affinity Partners).
• $20 billion** in debt financing, which is fully committed by JPMorgan Chase Bank.

Impact on EA and Future Outlook

The deal, which the company’s board has approved, is expected to close in the first quarter of fiscal year 2027, pending regulatory and shareholder approval. Key aspects of the company’s immediate future include:

• Shareholder Payout: EA stockholders will receive $210 per share in cash, which represents a 25% premium to the company’s unaffected share price before the news broke.
• Leadership and Headquarters: Andrew Wilson will continue to serve as EA’s CEO, and the company will remain headquartered in Redwood City, California.
• Strategic Advantage: By going private, EA will no longer face the pressures of the public stock market, which analysts suggest could give the company greater flexibility to make long-term strategic investments in areas like AI and cloud gaming, and potentially alleviate pressure for short-term, aggressive monetization strategies.

This major acquisition continues the consolidation trend in the video game space, following massive deals like Microsoft’s acquisition of Activision Blizzard, and places greater financial and geopolitical influence in the hands of sovereign wealth funds within the realm of interactive entertainment.