Reports indicate that Electronic Arts (EA) may soon become a privately held company through a colossal $50 billion deal. This potential transaction, which could be announced as early as next week, involves a consortium of investors, prominently featuring Saudi Arabia’s Public Investment Fund (PIF) and private-equity firm Silver Lake.
While EA`s current market valuation stands at approximately $43 billion, sources familiar with the ongoing private discussions suggest the sports simulation giant is being valued closer to $50 billion for this proposed acquisition.
Should this monumental deal materialize, it would mark the largest leveraged buyout in history. The previous record was set in 2007 when Texas-based utility company TXU was acquired for around $32 billion.
Saudi Arabia has significantly increased its presence in the gaming sector over recent years. Its sovereign wealth fund, the PIF, which owns mobile developer Scopely, acquired a gaming division from Pokémon Go developer Niantic. The fund also holds substantial stakes in major companies such as Activision Blizzard, Take-Two, Embracer, and Nintendo, and currently possesses a 2.6% share in EA itself.
EA is a renowned publisher, best known for its immensely popular sports simulation franchises like FIFA, Madden, and NBA. Its latest title is “Skate”, a reimagined free-to-play skateboarding simulator, which is set to launch its first official season on October 7.
However, the Public Investment Fund`s involvement has drawn considerable scrutiny due to its chairman, Crown Prince Mohammed bin Salman. As the de facto ruler and one of the most influential figures in Saudi Arabia, he is widely implicated in the 2018 assassination of journalist Jamal Khashoggi. Furthermore, the nation itself faces accusations of widespread human rights violations.
Saudi Arabia`s robust engagement in the sports world extends beyond gaming, notably through its formation of the LIV Golf organization. This venture ignited significant controversy when several PGA golfers defected to LIV. Although plans for a merger between the two organizations were announced, the consolidation has yet to materialize.