Electronic Arts has completed its $55 billion (£40.9 billion) acquisition by an investor consortium, making it a private company after 36 years on the stock exchange. The deal, announced in September, places the publisher under the control of Saudi Arabia's Public Investment Fund (PIF), along with Silver Lake and Affinity Partners, the latter founded by Jared Kushner.
Ownership and debt
According to a filing with Brazil's antitrust regulator, the PIF owns 93.4% of EA, while Silver Lake and Affinity hold 5.5% and 1.1% respectively. To close the deal, the PIF borrowed $20 billion (£14.8 billion), with the business taking on the debt.
EA CEO Andrew Wilson said in a statement: 'This moment recognises the extraordinary people whose creativity, ambition and passion have made EA one of the world's leading interactive entertainment companies. We're entering this next chapter from a position of strength with partners who share our vision and ambition. Together, we'll invest boldly, accelerate innovation, and build the next generation of games and experiences for the hundreds of millions of players and fans who inspire us every day.'
Cost-cutting measures
With $20 billion in debt, concerns have arisen over how EA will repay it. Bloomberg's Jason Schreier previously noted the acquisition could lead to 'mass layoffs, more aggressive monetisation, and other big cost-cutting measures'. Hours after the deal closed, EA told investors it would cut $700 million in annual costs, including $170 million in 'organisational efficiencies'.
EA has already had three rounds of layoffs this year, and the debt is likely to push the publisher to focus on its biggest franchises, potentially at the expense of smaller games under its EA Originals label, which produced titles like Unravel and It Takes Two.
PIF influence and censorship concerns
The PIF, controlled by Saudi Arabia's Prince Mohammed bin Salman, is now the largest stakeholder. Given the kingdom's human rights record and discrimination against LGBTQ+ people, there are concerns about potential censorship of titles like The Sims, which champions inclusivity. The PIF was previously a minority investor with 9.9%, but now holds a majority stake.
The deal continues Saudi Arabia's expansion into gaming, following its $3.5 billion purchase of Pokémon Go developer Niantic last year and its hosting of the Esports World Cup.
