Recent filings suggest Saudi Arabia’s Public Investment Fund (PIF) will own over 90% of EA under the current buyout plan. The deal has garnered considerable attention and speculation since before it was even official, with many both in and outside the gaming industry questioning how it could affect the video game giant and the sector as a whole. While much remains uncertain about EA’s privatization, a new report sheds light on how ownership will be divided between investors.
Shortly after a Wall Street Journal report leaked news of the deal, EA confirmed it was being acquired for $55 billion in the largest leveraged buyout in history. If all goes according to plan, EA stocks will no longer be available for public trading, with a small group of major investors taking complete ownership of the company. That group consists of the PIF and private equity firms Silver Lake and Affinity Partners, but it’s now looking like one of those three will have a much larger ownership stake than the others.
EA Issues Official Statement on $55 Billion Buyout
EA releases an official statement to employees and other stakeholders about its recent $55 billion buyout and how that might affect the company.
Saudi Arabia’s PIF Will Reportedly Own Over 93% of EA After Finalizing the Buyout
A new report from the Wall Street Journal alleges that the PIF will own 93.4% of EA under the current agreement. The remaining 6.6% won’t split evenly between the other two investors, either, with Silver Lake taking 5.5% of the company and Affinity Partners owning 1.1%. Earning that stake in the gaming giant will reportedly cost $29 billion from the PIF, an eye-watering price tag that would be even higher if Saudi Arabia didn’t already have a $5.2 billion stake in EA. Such a massive piece of the pie should also help the fund amid reports that the PIF is reportedly running low on funds after the EA deal, despite its having the backing of one of the world’s wealthiest nations.
The report cites an antitrust filing in Brazil for these figures. EA’s buyout will need regulatory approval from multiple nations before it can close, given EA’s major presence across the globe. With this in mind, more such documents will likely come out as the legal process continues, revealing more about the deal. Those regulatory hurdles may also threaten the acquisition. At least two U.S. senators have criticized the EA deal for “national security risks,” referencing how Saudi Arabia could use its ownership of EA to access sensitive data and gain influence over a global audience. It’s still too early to say whether these concerns will ultimately stop the buyout or impact the specifics of the deal, and if Microsoft’s Blizzard acquisition is anything to go by, it will take a long time, likely years, for things to settle.
Earning an alleged 93.4% stake in EA is just the latest in a trend of Saudi Arabia ramping up its involvement in the gaming industry. The PIF is also a major shareholder in Nintendo, and Saudi Arabia was originally supposed to host the first Olympic eSports Games, although the International Olympic Committee and the nation canceled that deal weeks after news of the EA buyout broke. It’s unclear exactly why the Olympic agreement fell through, but the nation still hosts the Esports World Cup every year.
At the time of writing, none of the parties involved in the EA transaction has commented on this new report. However, EA has previously issued a statement on the deal in general, promising its employees that its mission won’t change and that its creative freedom will remain intact. As for how things will play out in the real world, fans will have to wait and see what follows as the buyout makes its way through the regulatory process.
