Saudi Arabia Now Nearly Controls EA — Deal Details Revealed

When EA announced plans to go private, the transaction was framed as a standard buyout: a trio of investors was set to acquire the company for $55 billion.

According to the Wall Street Journal, the bulk of the financing will come from the Saudi Public Investment Fund (PIF), which would own 93.4% of Electronic Arts’ shares once the deal closes. Silver Lake and Affinity Partners would receive 5.5% and 1.1%, respectively, although PIF also holds sizable stakes in those firms. On paper it appears as a consortium, but control would effectively shift to PIF if regulators and shareholders sign off on the transaction.

Documents filed with Brazil’s antitrust authority indicate that of the $55 billion, $36.4 billion will be equity and another $20 billion will be debt. The WSJ estimates that PIF’s real contribution is about $29 billion after accounting for EA shares it already owned — a sum other parties to the deal could not match.

PIF has spent years accumulating positions in gaming companies — from Take-Two and Capcom to Nexon and Nintendo. Yet a near-total acquisition of EA is on a different scale. In October, EA CEO Andrew Wilson insisted that “EA’s values and commitments to players will remain unchanged.” Still, it’s difficult to ignore the influence of the investor financing the entire takeover.

Source: iXBT.games