Electronic Arts Set to Be Sold to Private Investors for Up to $50 Billion
In a move that could shake the gaming industry to its core, Electronic Arts (EA) is reportedly planning to take the company private in a deal worth up to $50 billion. According to sources cited by The Wall Street Journal, Reuters, and Financial Times, Silver Lake, Saudi Arabia's Public Investment Fund (PIF), and Jared Kushner's Affinity Partners are interested in investing in the mega-publisher.
The deal, which could be announced as early as next week, would likely be the largest leveraged buyout ever, according to The Wall Street Journal. EA's stock price jumped roughly 15 percent on Friday afternoon following a month of relative flatness, with investors sensing that a sale is imminent.
"Electronic Arts has been an attractive target for private equity firms and sovereign wealth funds due to its strong brand portfolio and growing market share," said Michael Pachter, a gaming analyst at Wedbush Securities. "A deal of this magnitude would be a significant vote of confidence in the company's prospects."
The Saudi PIF already holds a roughly 9 percent stake in EA as of last year, making it one of the largest shareholders in the company. The fund has also invested in other gaming giants such as Nintendo, Take-Two, Activision Blizzard, Capcom, Nexon, and Koei Tecmo through its Savvy Games Group.
The move to take EA private would mark a significant shift for the company, which went public with an initial public offering (IPO) on the NASDAQ stock exchange in 2005. The deal would also underscore the growing trend of private equity firms and sovereign wealth funds investing in gaming companies.
"This deal would be a major milestone for the gaming industry," said Daniel Ahmad, a senior analyst at Niko Partners. "It would demonstrate that private investors are willing to take on significant debt to acquire a company with such a strong brand portfolio."
The exact terms of the deal have not been disclosed, but sources indicate that it could be worth up to $50 billion. The sale process is expected to begin next week, with EA's board of directors set to meet to discuss the proposal.
As the gaming industry continues to grow and evolve, the sale of Electronic Arts to private investors would mark a significant turning point for one of its largest players. With the deal potentially worth up to $50 billion, it remains to be seen how this move will impact the company's future prospects and the broader gaming landscape.
Sources:
The Wall Street Journal
Reuters
Financial Times
Wedbush Securities
Niko Partners
*Reporting by Arstechnica.*
