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Saudi-led group finalizes $55bn leveraged buyout of Electronic Arts
The acquisition takes Electronic Arts private and funds it partly with about $20bn in borrowing that EA must repay.
The sale of Electronic Arts, maker of games including The Sims, EA FC and Mass Effect, has been finalized for $55 billion to a group led by Saudi Arabia's Public Investment Fund, with investors including Affinity Partners led by Jared Kushner.
The transaction will take EA private, meaning all of its public shares will be bought and the company will no longer trade on a stock exchange. The deal is described as one of the largest leveraged buyouts, with much of the funding coming from borrowed money.
According to the deal terms, the investors have already put in $36 billion, and PIF needs to borrow $20 billion from investment bankers JPMorgan to complete the purchase, with EA taking on the debt. The report notes analysts have speculated the repayment obligations could affect EA's business through cost cutting and changes to how it monetizes games.
The BBC also highlights that the buyout has drawn fan concern and political advocacy around the group's perceived approach to managing the company, and it cites claims that the purchase may lead to a more hands-on style similar to private equity firms.