EA, a gaming superpower that has reigned supreme over various genres for decades, could be going private as it is reportedly negotiating a $50 billion deal with the Saudi Arabian Private Investment Fund (PIF) and American private equity investment firm Silver Lake.
As per the Wall Street Journal, “a group of investors including private equity firm Silver Lake and Saudi Arabia's Private Investment Fund could unveil a deal for the publisher as soon as next week.” The price is yet to be determined, but sources told WSJ that EA's value could reach as high as $50 billion. If the deal does go through, it'll be the biggest “leveraged buyout deal” in history, eclipsing the acquisition of energy company TXU, which was purchased for 32 billion dollars, also by a group of private equity firms.
This would also mark yet another major investment coming out of Saudi Arabia's Private Investment Fund (PIF), which is directly controlled by Mohammed bin Salman, the prime minister, Crown Prince, heir apparent, and de facto leader of Saudi Arabia. Video games are just one of the industries the PIF has been targeting, with deals with Ubisoft and other major corporations in the industry, as well as organizations like the Esports World Cup, which was recently held in the country.
The PIF is the subject of much controversy worldwide, mostly due to reports of Saudi Arabia's human rights violations, absolute rule, public executions, and other controversies, both domestic and international.
EA has dominated much of the gaming market over the past couple of decades, especially holding a tight grip on sports and racing games, the former generating billions in revenue each year. It also has a wide array of popular franchises under direct control, including FC (formerly FIFA), Battlefield, Need for Speed, Madden NFL, Mass Effect, Dead Space, Dragon Age, and Skate. EA holds video game licenses for big media franchises as well, such as Star Wars.
EA's market cap is around $48 billion as of writing this article, with its share prices jumping 15 points today, likely reflecting these recent developments, as well as EA's successful release of Skate and the Battlefield 6 beta, the latter being one of the most anticipated first-person shooters ever.
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