Saudi-led group completes $55bn purchase of gaming giant EA
The sale of gaming giant Electronic Arts (EA) for $55bn (£41bn) to a group of buyers including Saudi Arabia's Public Investment Fund (PIF) has been
The sale of gaming giant Electronic Arts (EA) for $55bn (£41bn) to a group of buyers including Saudi Arabia's Public Investment Fund (PIF) has been finalised. The American company is known for making and publishing best-selling games such as EA FC, formerly known as Fifa, The Sims and Mass Effect. The investors, who include Affinity Partners - led by President Donald Trump's son-in-law, Jared Kushner - are taking EA private, meaning all of its public shares will be purchased and it will no longer be traded on a stock exchange.
It is thought to be the largest leveraged buyout in history, meaning a significant part of it is paid for with borrowed money, which the company will have to pay back. This is because as well as the $36bn it has already put into the deal, PIF needs to borrow $20bn from investment bankers JPMorgan to close it, with the business taking on the debt.
How paying back this debt will affect EA as a business has been the source of much speculation from journalists and analysts. Bloomberg's Jason Schreier surmised it could lead to "mass layoffs, more aggressive monetization, and other big cost-cutting measures, external", for one of the industry's biggest companies. Christopher Dring, editor-in-chief and co-founder of the Game Business, said the nature of the buyout, external was also likely to mean "a very hands-on approach from the investment group".
"Private equity firms are typically aggressive in their management of companies," he said.
The BriefWire