Saudi fund, Kushner’s firm to buy games maker Electronic Arts in $55bn deal

The largest leveraged buyout in history, worth $55 billion, was made by Saudi Arabia’s sovereign wealth fund, an investment firm led by the son-in-law of the US president, and a California-based private equity firm.

The $1 trillion Saudi venture, the Public Investment Fund (PIF), teamed up with Silver Lake Investment Partners, a technology and media-focused investment firm, and Jared Kushner’s Affinity Partners, a $1 trillion Saudi company.

A 25 percent premium over the company’s stock price prior to last week’s rumor of the deal and even a premium over the company’s record-high stock price of more than $ 179 in mid-August were reached when they reached a deal to pay EA shareholders.

EA’s shares increased by 15% from the initial rumors, and they have increased by at least another 5% since the deal was announced on Monday, allowing them to trade on Tuesday for more than $200 per share. The transaction, which places the company in private, is scheduled to close in the first quarter of the fiscal year 2027, which would ideally occur in 2026.

By the close of the deal, EA’s 36-year history as a publicly traded company will be over. It will no longer need to publish quarterly financial statements, and its stock will be removed from the NASDAQ.

The three sponsors will contribute about $36 billion in equity, including a 9 percent stake in the business, which the Saudi wealth fund already holds and is rolled in.

JPMorgan Chase is providing a history-making $20 billion in debt financing under the umbrella of the banking giant, about $ 18 billion of which will go toward closing the deal.

The transaction was approved by EA’s board of directors, EA stated in a statement. Stakeholders and regulatory bodies must still approve the agreement.

Due to the significant cash profits it will bring, the stakeholders are unlikely to decline the transaction, which is not thought to be affected by antitrust concerns like Microsoft’s acquisition of Activision Blizzard, which is a financial transfer of ownership rather than a merger of direct competitors.

Kushner, who had close ties with Arab leaders while he was president, commented on EA in a statement following the deal, saying, “I’ve admired their ability to create iconic, lasting experiences.

EA owns studios like Bioware and Maxis, which produce huge award-winning series like Mass Effect and The Sims, as well as huge game franchises like Battlefield, Sports FC football games, and Madden NFL.

CEO Andrew Wilson will continue in charge for the time being with the same structure and schedule.