Electronic Arts is reportedly near a deal that would take the company off the stock market and into the land of private companies.
Reported by the Wall Street Journal earlier today, this deal would apparently have a group of investors which includes Jared Kushner’s Affinity Partners, private equity firm Silver Lake, and Saudi Arabia’s Public Investment Fund. The value would be as much as $50 Billion, and it would be a leveraged buyout, meaning that EA’s own assets would serve as collateral for the debt that would be used to make the purchase.
The Public Investment Fund is already one of the biggest shareholders in Electronic Arts, and also own part of Affinity Partners, seemingly placing them as the main power brokers in the ownership structure going forward if the deal goes through, which could be as early as next week.
This follows a period where Electronic Arts has had mixed results from financial perspectives, with under performance of EA Sports FC 25 in the third quarter of fiscal year 2024-2025 fulled by a stronger finish to the fiscal year driven by Split Fiction.
If the deal were to go through, it could mark the largest leveraged buyout in history, and an exceptionally large deal in general. It definitely raises comparisons to the Microsoft purchase of Activision Blizzard, a deal which has had absolutely no problems at all.
The news is emerging as EA is preparing for one of its biggest releases of the year with Battlefield 6, which has been well received by players early on, following a rough previous release in the series. Looming over the deal also is the specter of artificial intelligence and many firms talking about the ability to downsize with making use of generative artificial intelligence, and the fact that leveraged buyouts often are followed by large cost cutting.
