Electronic Arts (EA) has officially been acquired by a consortium including the Saudi Arabia Public Investment Fund (PIF), Affinity Partners led by Jared Kushner, and investment firm Silver Lake. The deal, which closed late last night, sees EA delisted from the NASDAQ, with stockholders and employees set to receive $210 per share.
This acquisition marks a major transition for EA, moving it from public ownership to being privately held. In a press release, EA CEO Andrew Wilson stated that the company is entering a new chapter with partners who share its vision for accelerating innovation and developing the next generation of games. Turqi Alnowaiser, PIF Deputy Governor, highlighted entertainment and sports as key strategic areas for the fund, expressing confidence in EA's potential for sustained growth. Silver Lake CEO Egon Durban noted EA's innovative spirit and its ability to foster human connection through gaming, emphasizing plans to invest heavily in the company's growth, including leveraging artificial intelligence.
First announced in September of last year, the acquisition navigated several regulatory approvals, including those from the European Commission and the U.S. Federal Trade Commission. However, the process and the parties involved have drawn criticism, particularly concerning Jared Kushner's political ties and Saudi Arabia's human rights record.
The purchase is structured as a leveraged buyout, with EA taking on $18 billion in debt, resulting in annual interest payments of $1.8 billion. To manage this debt, significant changes are anticipated within the company. Executives have already begun implementing generative AI tools, though their return on investment remains uncertain. Speculation suggests potential layoffs, aggressive cost-cutting measures, and further monetization strategies.
According to reports, EA has informed debt investors of plans to cut $700 million in annual costs, with $170 million earmarked for "organizational efficiencies," which are widely interpreted as mass layoffs. The future under this new private ownership remains uncertain, especially given the reduced public disclosure requirements for private companies. This event represents a significant moment for EA and the broader Western game development industry.