What happened
Electronic Arts, the video game giant behind “The Sims” and “Madden NFL,” announced Monday that it had agreed to be acquired by investors including Saudi Arabia’s sovereign wealth fund, Jared Kushner’s Affinity Partners and private equity firm Silver Lake. The $55 billion deal would be the largest buyout of a publicly traded company in history.
Who said what
EA is a “sports-gaming juggernaut,” The New York Times said, and the deal is the Saudi fund’s latest effort to “advance into gaming” and sports “as it looks to diversify its investments away from oil.” The buyout will be financed by a “staggering” $20 billion of debt, Bloomberg reporter Jason Schreier said on social media. The likely result will be “some *aggressive* cost cutting,” including “mass layoffs” and “more aggressive monetization.”
Shareholders in EA, which has been publicly traded since 1990, would get $210 per share in cash under the deal, a 25% premium over the company’s stock price before investors caught wind of the buyout. Amid “strong buzz” about the upcoming release of “Battlefield 6,” The Wall Street Journal said, EA looks to be “getting out while the getting is good.”
What next?
The Saudi involvement means the deal needs approval from national security regulators on the Committee on Foreign Investment, “but there are plenty of reasons to expect it will go through,” The Associated Press said. Along with Kushner being President Donald Trump’s son-in-law, “the president could also be inclined to look favorably on any Saudi investment because he has benefited directly from their spending.”
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