Videogame giant Electronic Arts will be taken private in a record-breaking US$55-billion leveraged buyout by a consortium consisting of private equity firm Silver Lake, Saudi Arabia’s Public Investment Fund and Jared Kushner’s Affinity Partners, the company said Monday.
The deal for the maker of Battlefield underscores how deep-pocketed investors are betting on the enduring value of blockbuster game franchises as the industry recovers from a prolonged downturn.
It would be the largest leveraged buyout on record, eclipsing TXU Energy’s 2007 takeover and other landmark transactions of that decade, including Toys “R” Us and Hertz, and comes amid a rebound in global dealmaking as easing borrowing costs revive appetite for mega-transactions.
Under the deal, EA shareholders will receive $210/share in cash, representing a premium of 25% as of the closing price on September 25 before reports of a deal emerged. The deal has an equity value of $52.5-billion.
The take-private offer comes at a crucial time for EA, which is banking heavily on its core sports portfolio and action shooter intellectual property to weather a sluggish videogame industry as gamers get picky with spending.
Electronic Arts is gearing up to launch the much-awaited Battlefield 6 in an industry where gamers stick to proven and recognisable titles.
“While the $210/share offer price may appear compelling … we believe it falls materially short of the company’s intrinsic value. With Battlefield 6 about to launch and a pipeline that could add more than $2-billion in incremental bookings by FY28, the true earnings power of EA is only beginning to emerge,” Benchmark analysts said.
The company’s sports portfolio has stood out for more than a decade due to its global popularity and consistent recurring revenue as strong in-game spending patterns remain key for the franchise’s longevity.
Termination clause
Electronic Arts said the deal consists of an equity investment of around $36-billion, and $20-billion of debt financing committed by JPMorgan, $18-billion of which is expected to be funded at the transaction’s close.
The transaction, which is expected to close in the first quarter of the 2027 financial year, will be funded by a combination of cash from PIF, Silver Lake and Affinity Partners, as well as a rollover of the PIF’s existing stake in EA.
Read: Finally! UK clears Microsoft’s massive Activision deal
EA must pay a $1-billion fee if it terminates the merger due to a board reversal, accepts a higher bid or pursues another deal within a year of a shareholder rejection. The consortium owes the same amount if regulatory delays push completion past 28 September 2026, or if it breaches the agreement. — Zaheer Kachwala, (c) 2025 Reuters
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