Video-game maker EA agrees to $71b sale in record buyout

Investors include Trump's son-in-law's firm and Saudi Arabia's sovereign wealth fund

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Electronic Arts (EA) has agreed to sell itself in the largest leveraged buyout on record to a group of investors that includes a firm managed by US President Donald Trump's son-in-law Jared Kushner and Saudi Arabia's sovereign wealth fund.

The massive deal, valuing the video-game company at about US$55 billion (S$71 billion), is the latest effort by Saudi Arabia to diversify beyond oil into sports and gaming, a financially tumultuous industry that is increasingly at the heart of youth culture around the planet.

Saudi Arabia’s Public Investment Fund (PIF), along with Silver Lake Management and Mr Kushner’s Affinity Partners, agreed to pay US$210 per share in cash, a 25 per cent premium to where EA traded before the talks leaked on Sept 26.

JPMorgan Chase & Co is providing US$20 billion of debt, the largest debt commitment for a buyout ever.

The sale is the latest sign that the deal boom expected under the Trump administration is starting to take hold, cementing the most active quarter for mergers in more than three years.

It also comes at a particularly turbulent time for the US$178 billion video-game industry. During the initial pandemic lockdowns, gameplay soared and gaming culture hit new heights as TV shows and movies based on them dominated the global charts. All of which inspired video-game companies to ramp up the development of new and increasingly expensive titles with budgets that often ran into the hundreds of millions of dollars.