Saudis will essentially own EA after $55 billion buyout, PIF to gain 93% stake
TL;DR: Saudi Arabia’s Public Investment Fund will own 93.7% of Electronic Arts after a proposed $55 billion leveraged buyout, making it the primary owner of the major video game company behind franchises like FIFA and Madden. The deal, funded mostly by PIF, is pending regulatory approval and retains EA’s current management.
Saudi Arabia’s PIF will have a 93.7% stake in Electronic Arts following the proposed $55 billion buyout, the Wall Street Journal reports.
If the $55 billion leveraged buyout goes through, Saudi Arabia will effectively become the new owner of EA, one of the largest video games companies in the world that is responsible for several billion-dollar franchises, including FIFA/FC, Madden, Apex Legends, and Star Wars.
Three groups have joined forces to buy EA stock and take the company private. The consortium consists of Silver Lake, Affinity Partners, and Saudi Arabia’s Public Investment Fund, the latter of which has been investing billions to buy up companies like Scopely. New filings from Brazilian antitrust regulator CADE reveals an ownership breakdown of EA if the deal is approved, with the Saudis taking nearly 94% of ownership of EA and funding most of the deal.
EA post-$55 billion leveraged buyout
Saudi PIF - 93.4%
Silver Lake - 5.5%
Affinity Partners - 1.1%
The WSJ also does a cost breakdown of the deal, noting that the trio is funding the buyout with $36.4 billion in equity and $20 billion of debt–the loan is Single-B, and has been described as “high-risk”.
The PIF also had an existing $5.2 billion invested into EA, and that will be included in the purchase. It’s further interesting to note that the PIF has “significant” investments in both Silver Lake and Affinity Partners.
Electronic Arts shareholders approved the deal and the buyout is currently being weighed by worldwide regulators. Existing executive management, including EA’s CEO Andrew Wilson, will remain at EA following the deal.