Rumours of a possible full privatisation of EA have been swirling in recent weeks, and there was even speculation that Netflix could be the buyer behind the deal, although it was also heard that it was eyed by Warner Bros. We now know that is not the case.
A Board of companies and corporations formed by PIF (which renews its 9.9% stake in the company), Silver Lake, and Affinity Partners have reached an agreement to acquire 100% of EA, paying around $210 per share, which represents a 25% premium. In addition, the transaction has been completed in cash and now holds EA at a stock market value of around $55 billion, the largest all-cash transaction in history.
"Our creative and passionate teams at EA have delivered extraordinary experiences to hundreds of millions of fans, created some of the world's most iconic IPs and generated significant value for our company. This moment is a great recognition of their remarkable work," said Andrew Wilson, president and CEO of Electronic Arts. "Going forward, we will continue to push the boundaries of entertainment, sports and technology, opening up new opportunities. Together with our partners, we will create transformative experiences to inspire generations to come. I'm more excited than ever about the future we're building."
"PIF enjoys a unique position in the global video games and esports sectors, creating and supporting ecosystems that connect fans, developers and creators of intellectual property," said Turqi Alnowaiser, PIF's Deputy Governor and Head of International Investments. "PIF has demonstrated a strong commitment to these sectors, and this partnership will help drive EA's long-term growth while driving innovation in the industry on a global scale."
The transaction was approved by EA's Board of Directors and is expected to close in the first quarter of fiscal year 2027, upon securing the required regulatory approvals and EA shareholder approval. Following the closing of the transaction, EA's common stock will no longer be listed on any public market and EA will exit NASDAQ.
"Electronic Arts is an extraordinary company with a world-class management team and a bold vision for the future. I admire their ability to create iconic and enduring experiences, and as someone who grew up playing their video games and now enjoys them with his children, I am excited about what the future holds," said Jared Kushner, CEO of Affinity Partners.
"The Board carefully evaluated this opportunity and concluded that it offers attractive value for shareholders and benefits all stakeholders," said Luis A. Ubiñas, Lead Independent Director of EA's Board of Directors. "We are pleased that this transaction will generate immediate and secure cash value for our shareholders, while strengthening EA's ability to continue to build the communities and experiences that define the future of entertainment.
The EA privatisation process will therefore still spend some time under review by competition authorities, as was also the case with Microsoft's acquisition of Activision Blizzard King.
How do you think this privatisation of Electronic Arts will affect the development of the company's current and future projects?