Electronic Arts, the creator of popular video games such as Madden NFL, Battlefield, and The Sims, is set to be acquired for a staggering $55 billion US, marking the largest leveraged buyout attempt in history. The deal, announced on Monday, entails private equity firm Silver Lake Partners, Saudi Arabia’s sovereign wealth fund PIF, and Affinity Partners purchasing the company’s shares at $210 each. Notably, Affinity Partners, led by Jared Kushner, son-in-law of President Donald Trump, is among the acquiring entities.
If the acquisition proceeds as planned, Electronic Arts (EA) will transition from a publicly traded entity to a privately held company. The total value of this deal surpasses the $32 billion spent to privatize Texas utility TXU in 2007, signifying a significant financial transaction.
Founded by William “Trip” Hawkins, a former Apple employee, EA commenced its journey into the gaming industry with shares valued at 52 cents on its first trading day, culminating in a 36-year history as a publicly traded corporation. The company’s CEO, Andrew Wilson, has been at the helm since 2013, steering EA through its evolution.
With roots in Canada, EA acquired Distinctive Software based in Burnaby, B.C., in 1991, subsequently rebranding it as Electronic Arts Canada, now recognized as EA Vancouver. This studio has been instrumental in developing major franchises like EA Sports FC and the NHL series, contributing to EA’s diverse portfolio.
In a separate notable venture, Silver Lake, a key player in the EA acquisition, has also been involved in a joint venture with Oracle concerning the takeover of TikTok’s U.S. operations, supplementing its track record of successful tech acquisitions.
Transitioning to a private entity will enable EA to revamp its strategies without the constraints of public market demands, fostering more strategic decision-making. Despite a loyal fan base, EA’s revenues have plateaued in recent years, prompting this move to enhance operational flexibility.
In a competitive landscape, EA faces challenges from industry players like Microsoft’s acquisition of Activision Blizzard and the rising competition from mobile game developers like Epic Games. Post-privatization, EA may undergo operational restructuring, a common practice in such transitions, although specifics regarding potential layoffs remain undisclosed.