Electronic Arts Nears Record-Breaking $50B Private Buyout, Shaking Up the Gaming Industry
Electronic Arts, the gaming behemoth responsible for beloved franchises such as Madden NFL, The Sims, and Battlefield, is reportedly on the brink of sealing a monumental $50 billion deal to privatize. The transaction, spearheaded by private equity firm Silver Lake and Saudi Arabia’s Public Investment Fund, is poised to become the largest leveraged buyout in history, outdoing TXU Energy’s $45 billion deal from 2007.
The news of the deal sent EA’s stock skyrocketing 15% on Friday, reaching a peak of $197.33 as investors responded to the potential bonanza. The deal places a value on EA significantly above its current $48.38 billion market cap, offering a premium for shareholders who have witnessed the stock rise 32% this year.
Industry analysts perceive this as a crucial turning point for the gaming sector, where private equity firms have poured in over $21 billion since 2018. The timing aligns with EA’s forthcoming Battlefield 6 release on October 10 and comes on the heels of recent financial hurdles, including a 6.4% revenue dip year-over-year in the company’s latest quarterly results.