Saudi Arabia, Jared Kushner in record EA buyout deal

Videogame giant Electronic Arts will be taken private in a record-breaking $55 billion leveraged buyout by a consortium consisting of private equity firm Silver Lake, Saudi Arabia's Public Investment Fund, and Affinity Partners, which is founded and led by Donald Trump’s son-in-law, Jared Kushner.

The deal for the maker of "Battlefield" underscores how deep-pocketed investors are betting on the enduring value of blockbuster game franchises as the industry recovers from a prolonged downturn.

It would be the largest leveraged buyout on record, eclipsing TXU Energy's 2007 takeover and other landmark transactions of that decade, including Toys "R" Us and Hertz, and comes amid a rebound in global dealmaking as easing borrowing costs revive appetite for mega-transactions.

Under the deal, EA shareholders will receive $210 per share in cash, representing a premium of 25% as of the closing price on September 25 before reports of a deal emerged.

The deal has an equity value of $52.54 billion, according to Reuters' calculations.

The take-private offer comes at a crucial time for EA, which is banking heavily on its core sports portfolio and action shooter intellectual property to weather a sluggish videogame industry as gamers get picky with spending.

Electronic Arts is gearing up to launch the much-awaited "Battlefield 6" in an industry where gamers stick to proven and recognizable titles.

"While the $210 per share offer price may appear compelling … we believe it falls materially short of the company’s intrinsic value. With Battlefield 6 about to launch and a pipeline that could add more than $2B in incremental bookings by FY28, the true earnings power of EA is only beginning to emerge," Benchmark analysts said.

The company's sports portfolio has stood out for over a decade due to its global popularity and consistent recurring revenue as strong in-game spending patterns remain key for the franchise's longevity.

Electronic Arts said the deal consists of an equity investment of around $36 billion, and $20 billion of debt financing committed by JPMorgan, $18 billion of which is expected to be funded at the transaction's close.

The transaction, which is expected to close in the first quarter of fiscal year 2027, will be funded by a combination of cash from PIF, Silver Lake and Affinity Partners, as well as a rollover of the PIF's existing stake in EA.

EA must pay a $1 billion fee if it terminates the merger due to a board reversal, accepts a higher bid, or pursues another deal within a year of a shareholder rejection.

The consortium owes the same amount if regulatory delays push completion past September 28th, 2026, or if it breaches the agreement.