EA Sold to Saudi Arabia and Trump's Son-in-Law for $55B

The rumors were true: Electronic Arts has announced that it's sold itself in a $55 billion deal. EA sold itself to an "investor consortium" made up of Saudi Arabia's Public Investment Fund, Jared Kushner's Affinity Partners, and the private equity firm Silver Lake.

EA said the all-cash deal "positions EA to accelerate innovation and growth to build the future of entertainment." EA CEO Andrew Wilson is still on board as CEO.

The investor consortium will take over 100% of EA. The PIF already had a 9.9% stake in EA prior to this deal.

$210 per share

It's a good day for EA stockholders, too, as they are getting $210 per share in cash as part of the deal--that's a significant premium over what the stock was trading for last week.

"Our creative and passionate teams at EA have delivered extraordinary experiences for hundreds of millions of fans, built some of the world’s most iconic IP, and created significant value for our business. This moment is a powerful recognition of their remarkable work," Wilson said. "Looking ahead, we will continue to push the boundaries of entertainment, sports, and technology, unlocking new opportunities. Together with our partners, we will create transformative experiences to inspire generations to come. I am more energized than ever about the future we are building."

PIF's Turqi Alnowaiser said, "This partnership will help further drive EA's long-term growth, while fueling innovation within the industry on a global scale."

Silver Lake's Egon Durban shared an enthusiastic quote, too. He said, "The future for EA is bright, we are going to invest heavily to grow the business, and we are excited to support Andrew and the EA team as the company accelerates innovation, expands its reach worldwide, and continues to deliver incredible experiences to players and fans across generations."

As for Kushner, President Trump's son-in-law said, "Electronic Arts ​is ​an ​extraordinary ​company with a ​world-class ​management ​team and a bold vision ​for ​the ​future."

Cost-cutting concerns

Part of the deal is being funded by $20 billion in debt financing. That's a lot of debt, and people are already wondering and worrying about cost-cutting measures. It remains to be seen, however, if EA under its new ownership will undergo a cost-cutting plan. Oftentimes large mergers and acquisitions lead to cost-reduction programs that result in layoffs and other downsizing.

Wilson's memo to staff

EA shared Wilson's memo to staff regarding the sale. The news broke around 8 AM ET on September 29, so it's likely a number of staffers are waking up on their Monday morning to discover what went down. Wilson said the deal is "in the best interests of our company and our stockholders."

He added: "This moment is a recognition of your creativity, your innovation, and your passion. You have built some of the world’s most iconic IP, created stories that have inspired global communities, and helped shape culture through interactive experiences. Everything we have achieved--and everything that lies ahead--is because of you."

The executive went on to say the deal represents a "new era of opportunity for EA" thanks to the size of the deal--$55 billion.

"Our new partners bring deep experience across sports, gaming, and entertainment. They are committed with conviction to EA--they believe in our people, our leadership, and the long-term vision we are now building together," Wilson said. "Our values and our commitment to players and fans around the world remain unchanged."

Not a done deal

To be sure, what was announced today, September 29, was the deal itself. The actual transaction is not finalized and is subject to government scrutiny. That being said, EA said it expects the deal to close in Q1 FY27. The deal closing is subject to "customary closing conditions," including regulatory approval and a sign-off by EA stockholders. Should the deal close, EA's stock will be removed from public markets. The deal is also subject to certain termination fees of more than $1 billion.

Saudi Arabia's involvement

The PIF has attracted significant controversy over Saudi Arabia's wide range of human rights violations. The PIF, through its Savvy Games Group, has invested in or acquired numerous gaming companies over the years. Before EA, Savvy bought Pokemon Go developer Niantic's gaming division for $3.5 billion. The company also owns mobile and social gaming giant Scopely, paying $4.9 billion.

The PIF also owns stakes of Activision Blizzard, Take-Two, Embracer, and Nintendo.

The deal to buy EA is now the No. 2 biggest acquisition in the history of gaming, and one of the largest in any business sector of all time. The biggest gaming buyout ever was Microsoft's $75.4 billion acquisition of Activision Blizzard.

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