Electronic Arts, the creator of popular video game titles such as Madden NFL, Battlefield, and The Sims, is set to be purchased for a staggering $55 billion, marking the largest leveraged buyout endeavor in history. The deal, unveiled on Monday, outlines that the private equity firm Silver Lake Partners, Saudi Arabia’s sovereign wealth fund PIF, and Affinity Partners will acquire the company for $210 per share from its stockholders. Notably, Affinity Partners, led by Jared Kushner, the son-in-law of President Donald Trump, is among the entities involved in the acquisition.
This acquisition would transition Electronic Arts (EA) into a private entity, surpassing the $32 billion acquisition of Texas utility TXU in 2007 in terms of total value. If the transaction proceeds as planned, it would mark the end of EA’s 36-year stint as a publicly traded company, which commenced with its shares closing at a split-adjusted 52 cents on its debut trading day. The company’s public journey began seven years after its founding by former Apple employee William “Trip” Hawkins, who developed a passion for analog baseball and football games during the 1960s.
Since 2013, EA has been under the leadership of its current CEO, Andrew Wilson. The company’s Canadian ties trace back to its acquisition of Burnaby, B.C.-based game developer Distinctive Software in 1991, later rebranded as Electronic Arts Canada, now known as EA Vancouver. This studio has been instrumental in creating major franchises like EA Sports FC and the NHL series for the company.
Currently, EA operates numerous video game studios and offices nationwide, including locations in Edmonton, Montreal, Toronto, and Victoria, B.C., as per information on its website.
In a separate high-profile deal involving Silver Lake, the private equity firm has recently been engaged in a joint venture with Oracle focused on taking over the U.S. oversight of the social video platform TikTok. Silver Lake’s past buyouts include the acquisition of Skype in 2009 for $1.9 billion and the buyout of Dell in 2013 for $24.9 billion, with Dell later returning to the stock market in 2018 after restructuring.
By transitioning to a private entity, EA aims to restructure its operations without the pressures and scrutiny faced by publicly traded companies, which often lead to short-term decision-making to meet financial targets. Despite its games maintaining a dedicated following, EA’s revenues have plateaued over the past three fiscal years, ranging from $7.4 billion to $7.6 billion annually. In a competitive landscape, EA faces challenges from rivals like Activision Blizzard, acquired by Microsoft for nearly $69 billion in 2023, as well as the growing competition from mobile game developers like Epic Games.
Following the privatization of formerly public companies, cost-cutting measures are often implemented, potentially resulting in layoffs. However, there has been no confirmation of such actions at EA. The company had previously downsized its workforce by approximately five percent in 2024, ending March with 14,500 employees, and further layoffs of several hundred employees were reported in May.
