Electronic Arts is close to reaching a $50 billion deal that will turn it into a privately held company, according to The Wall Street Journal. The video game company filed for an IPO way back in 1990 and has been public ever since, but now a group of investors are in talks with the company to take it private. Those investors reportedly include private equity firm Silver Lake, Saudi Arabia’s Public Investment Fund (PIF) and Jared Kushner’s Affinity Partners, whose largest source of funding is also Saudi’s PIF.
It’s worth noting that EA’s shares are already tied to major financial organizations, even though it’s publicly traded, with Saudi’s PIF owning almost 10 percent of the company. As Reuters notes, analysts believe Saudi is interested in buying out EA due to its annual release of popular sports titles, including Madden and NHL, which makes for predictable earnings.
Saudi has made several major investments in the video gaming industry overall as part of its efforts to prepare for a post-oil economy. In addition to its investment in EA, it also purchased stakes in Take-Two Interactive, Activision Blizzard, Nintendo and the Embracer Group. In March, Pokémon Go maker Niantic sold its gaming division to a Saudi-owned company, as well. Unlike PIF and Kushner’s Affinity Partners, Silver Lake doesn’t have a huge stake in EA at the moment and doesn’t have notable gaming investments other than its stake in Unity.
Bloomberg and The Financial Times report that the company could announce the buyout as soon as next week, but details could change since nothing has been finalized yet. If the $50 billion deal does push through, it’ll become the biggest leveraged buyout of all time.
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