Video game giant Electronic Arts, commonly known as EA, is reportedly nearing a massive deal to go private. Founded in 1982, EA has been public since 1990. In the decades since, the publisher has acquired a long list of major studios and helmed major franchises like The Sims, Battlefield, and FIFA.
Now, EA is allegedly on the verge of a $50 billion deal that would take the company private, as reported by the Wall Street Journal. The offer comes from a group of investors that includes Silver Lake, one of the world’s largest private equity firms, and Saudi Arabia’s controversial Public Investment Fund. WSJ reports that a deal could be unveiled “as soon as next week.”
EA’s $50 Billion Buyout Deal Would Break Records
A $50 billion deal to go private would be record-breaking, and WSJ states that it would “likely be the largest leveraged buyout of all time.” Previous record-setters include major buyouts like RJR Nabisco and TXU Energy, but without accounting for inflation, a $50 billion deal would outdo them.
This follows recent discussions surrounding Ubisoft potentially going private, although the company’s restructuring ultimately took a different approach. Saudi Arabia’s PIF has also appeared in Ubisoft conversations, as it recently funded a new Assassin’s Creed DLC from Ubisoft, and its involvement in the gaming industry extends to companies like Nintendo and Activision Blizzard.
EA Going Private Would Be A Major Shake-Up
EA has a contentious track record in the gaming industry, receiving a continual barrage of criticism over the past several decades. With a history of shuttering studios and extensive use of microtransactions in flagship franchises and yearly sports titles, the company has struggled to maintain a positive reception despite its titanic status in the industry. EA just released the free-to-play title skate. to mixed reviews, but hype for next month’s Battlefield 6 is high.
At the moment, it’s hard to say where a deal to go private could take the company. Going private is often healthy for large corporations, reducing some of the stockholder pressure to deliver impressive quarterly results that might run counter to long-term success. On the other hand, private equity firms can be equally deleterious, and the involvement of the PIF raises concerns about Saudi Arabia’s troubling human rights track record.
Whatever the outcome might be, a deal to take EA private would have a huge impact on the gaming industry. Based on the report, it might not be long before we have more answers.
- Date Founded
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May 27, 1982
- CEO
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Andrew Wilson
- Services
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EA Play