EA Shareholders Greenlight $55 Billion Acquisition by Saudi Arabia

EA’s shareholders are clearly eager for a buyout, regardless of the source of funds. The potential sale, which would see the 43-year-old company primarily owned by Saudi Arabia’s Public Investment Fund (PIF), could be finalized by early 2027, pending government approval, following a favorable vote from public investors. Government approval may not be too challenging, especially considering that Jared Kushner, Trump’s son-in-law, stands to gain from 1.1 percent of the deal.

If the deal goes through, EA will transition to a private entity 37 years after going public, with ownership divided among three parties. A staggering 93.4 percent will be held by the regime of Crown Prince Mohammed bin Salman through Saudi Arabia’s sovereign wealth fund. Meanwhile, 5.5 percent will go to the California-based private equity firm Silver Lake, and 1.1 percent will be allocated to Affinity Partners, Kushner’s investment firm, which is largely funded by Saudi Arabia. If completed, EA shareholders could see a substantial payout of $210 per share.

While this would provide a lucrative payday for shareholders, including EA management, it also means the company would be burdened with $20 billion in debt from the inflated share price, severely impacting its credit rating and raising concerns about its long-term viability. Additionally, the fact that the company would be predominantly owned by a state known for its human rights violations—including the persecution of LGBTQ+ individuals, the murder of journalists, and the denial of women’s rights—adds a layer of apprehension for EA employees. The potential influence of the PIF on company policies and game content is uncertain and could lead to significant changes.

Given the precarious financial situation that would result from this deal, along with the likelihood of layoffs to manage costs and potential resignations from employees disillusioned by the ownership, it seems improbable that EA could continue to operate in any recognizable form. While titles like FC26 and Battlefield 6 have been successful, they require substantial investments that yield smaller returns compared to the mobile games that dominate the industry’s $200 billion market.

This deal is bound to undergo extensive scrutiny globally, similar to the examination of Microsoft’s $67 billion acquisition of Activision Blizzard King, though it may face less resistance in the U.S. The FTC’s opposition to the Microsoft deal was fierce, but the political landscape has shifted, and Kushner’s involvement could facilitate a smoother approval process.

From the shareholders’ viewpoint, EA has struggled to produce significant hits in recent years and has not shown signs of a turnaround. This buyout presents an opportunity to cash out with a hefty profit, regardless of the human implications or the company’s future trajectory.